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Prashant Chamoli (Legal retainer)     15 January 2011

Service Tax

A contract agreement was signed on 20.11.2003. The dispute arouse when the contractor raised a claim for service tax. Whereas the contract agreement stated that the prices included are inclusive of excise duty, Sales tax, Entry tax, octori or any other tax.
The contractor claims the ground that service tax came on 10.09.2004 and any tax enforced by Govt of india and new change/new statutory taxes are payable by purchaser as per contract law.
whereas the Purchaser/first party claim that service tax was imposed on 01.07.2003 and as contract price included all taxes, service tax is not reimbursed.



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 8 Replies

A V Vishal (Advocate)     16 January 2011

The contractor is right, as any levy of tax by the government during the continuance of the contract will make the contractee pay the extra amount on account of such tax/duty/levy/cess etc...

Prashant Chamoli (Legal retainer)     16 January 2011

Vishal ji u havent given any reference and you have ignored the dates when the service tax was inforced, whether it is 01.07.2003 or 10.09.2004. the question is also wen it was imposed.

A V Vishal (Advocate)     16 January 2011

Please quote the nature of the service so that I can refer the correct date of imposition and clarify your query

Prashant Chamoli (Legal retainer)     17 January 2011

Erection, Installation and Commisioning

Constructing of 220 KV single circut line

A V Vishal (Advocate)     17 January 2011

You are correct the said Services are brought under the Service Tax net by the Finance Act, 2003, w.e.f. 1-7-2003 vide Notification No. 7/2003, dated 20-6-2003. Hence you are not liable to reimburse the service tax.

J.S.Sodhi (Advance lead auditor)     18 January 2011

Please advise if service tax is applicable to auditor who is conducting Human audits or Social audits ( Child labor, force labor) etc.....

Thanks & regards

J.S.Sodhi

Ketan Modi (Self Employed)     22 January 2011

Recently I had come across an ad-hoc exemption notification exempting certain assessees from Service Tax liabilities after issuance of SCN.  have in my possession file notings wherein professional tax officers at the rank of Chairman and Member of CBEC had opined that giving retrospective benefit to assessees after issuance of Show Cause is not possible legally. However, Finance Minister, who had himself endorsed this view when the file was presented before him, prevailed upon the CBEC and Revenue Department to introduce the ad-hoc exemption notification thus illegally writing off nearly Rs.225 crore. The provision under which the ad-hoc exemption notification is issued is categorical that it should be in public interest and the reasons must be specified in the notification so issued. FM had prevailed upon the CBEC to issue the notification in public interest without specifying the reasons. Thus it is an illegal order and deserves to be set aside. That is the reasons why I am desirous of challenging it. Just two or three assessees are benefiting from this order and others in similar activities have already placed on record that it is discrimination they are subjected to. Hope this gives experts an idea why such illegal acts should be challenged  I wish to challange this notification issued before the High Court. Are there any SC/HC orders describing exemption notification with retrospective effect as illegal?
Ketan Modi

Freer (xbcbx)     25 January 2011

The Central Board of Excise & Customs (CBEC), Department of Revenue, Ministry of Finance, deals with the task of formulation of policy concerning levy and collection of Service Tax. The CBEC is assisted by the Directorate of Service Tax located at Mumbai.  The Service Tax is being administered by various Central Excise Commissionerate spread across the country...

 

 

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