Service Tax - Value of goods and materials supplied free of cost outside taxable value or gross amount charged - CESTAT LB
THE Larger Bench of the CESTAT passed a landmark classic order on Friday. In construction service, if the service recipient provides cement and steel, should the value of the cement and steel be included in the “gross amount charged” or the ‘consideration' received for providing the service? Board had clarified that gross amount charged shall include the value of goods and materials supplied.
The Larger Bench in an erudite sentence held, "goods and materials, supplied/ provided/ used by the service provider for incorporation in the construction, which belong to the provider and for which the service recipient is charged towards the value of such supply/ provision / use and the corresponding value whereof was received by the service provider, to accrue to his benefit, whether independently specified as attributable to the specific material/ goods incorporated or otherwise, would alone constitute the gross amount charged." This simply means that only the value of goods supplied by the service provider and not the recipient should be included in the gross amount.
We bring you this scholarly order today. Please see Breaking News. Please also see today's article in ST se GST Tak.