sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
Service Tax »
 12 ways to avoid paying more for bank services
 I-T return filing: Income Tax offices, Ayakar Seva Kendras to remain open from March 29-31
 Top 5 money matters you must settle before March 31 From income tax returns to LTCG,
 Steep fines for missing March 31 income tax deadline
 CBEC clears some air on refunds under GST, central excise, service tax laws
 3 key tax changes for senior citizens which will come into effect from April 1, 2018
 Income tax returns (ITR) filing: Not filed returns for 2 years? Beware! Deadline nearing
 All you want to know about HRA: When you can claim and how it is calculated?
 Income Tax Saving: 6 ways to save tax without investing before March 31 tax deadline
 Unnable to file your tax return? Take help of these portals
 Do you know which 80C instruments can help you save tax and carry no future tax liability?

Gross amount charged for service tax
September, 09th 2010

Is the value of free supplies includable in the gross value for the purpose of charging service tax? Pravin Bagadia

As per notification no.1/2006-ST dated March 1, 2006, the contractor can charge service tax on 25% of the gross amount charged if the gross amount includes the value of land or charge service tax on 33% of the gross amount charged if the gross amount does not include value of land.

The gross amount charged includes the value of the goods and material supplied or provided or used for providing the service and hence the gross amount will have to include the value of the material used by you as well as the value of the free supplies.

In the case of Jaihind Projects Ltd versus commissioner of service tax, Ahmedabad, 2010 (18) STR 650 the brief facts are as under

The appellant, engaged in laying in of pipelines, is covered by Commercial or Industries Construction service, and availed abatement of 67% vide Notification No. 15/2004 and paid service tax on the balance amount excluding value of free supplies. The abatement was denied on the ground of non-inclusion of value of free supplies of pipes by the service recipient used in construction services. Penalty also was levied u/s.76 and u/s.78. The appellant contested that the value of free supplies is not includible in gross amount charged, as appellants have not charged anything for free supplies.

The CESTAT opined that the case was covered by Rule 3 of the service tax (determination of value rules), 2006 providing for valuation of services. The said rule provides that value of consideration would be the gross amount charged inclusive of monetary and non-monetary consideration and where such valuation is not possible, the gross amount charged would be money equivalent to consideration charged and in no case it would be less than the cost of provision of service.

It also states that proviso to the notification only explains when and how the benefit of this notification can be taken. The explanation in current case is only explaining actual meaning of gross amount charged and does not expand the scope of main operative part of notification. So, the value of free supplies is to be included in the gross amount charged.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Development Software Programming Software Engineering Custom Software Development Requirement Based Software Development Software Solutions Software Serv

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions