Order Date – 22 January 2024

Paries: Adani Bunkering Pvt. Ltd Vs Commissioner of C.E., Ahmedabad - ii

Facts – 

• The Appellant, Adani Bunkering Pvt. Ltd, have paid the service tax on the total value of the invoice raised by the Foreign Service Provider under reverse charge mechanisms. As per the Income Tax Act, the appellant have discharged the TDS on the invoice value and the same was borne by the appellant.
• The Department was of view that the appellant is liable to pay service tax on the TDS, deposited to the Income Tax  department in relation to the payment made to the Foreign Service Provider and when the TDS is over and above the invoice value of service.

Issue –

• Whether the appellant is liable to pay service tax on the TDS, deposited to the Income Tax department when the TDS is over and above the invoice value of service?

Order –

• The Tribunal observed that as per Section 67, it is clear provision that the only the gross value towards the service paid or payable shall be chargeable to Service Tax. In this case the gross value is the value of invoice on which service tax was discharged.
• In the present case, neither the TDS was part of the invoice value nor the appellant have paid the amount towards TDS to their service provider. In this case, the TDS amount cannot be charged to service tax. This issue has been considered in various judgments, it was held that the TDS deposited which is over and above the invoice value cannot be charged to service tax.
• Accordingly, the demand in the present case is not sustainable, hence the impugned order is set aside. Appeal is allowed.