M/s M.P. SECURITY FORCE Vs COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, BHOPAL (MP): 02.08.2019 - Service Tax - The appellant collected service tax from the clients but did not deposited with the service tax department under bona fide belief that no tax was payable on supply of manpower and security services – whether the component of salary, EPF, ESI and uniform allowances etc. are includible for computation of the assessable value in terms of Section 67 of the Finance Act for the payment of service tax – HELD - the contributions made towards the EPF and ESI Acts are in the nature of statutory contribution and required to be deducted by the appellant as immediate employer on behalf of Principal Employer. Thus, these contributions cannot be treated as value of such service under Section 67 of the Act. Therefore, there is no authority provided in the law for subjecting these contributions to service tax under Section 67 of the Act - The provisions of the PF and ESI Act makes it clear that it will be the primary responsibility of the principal employer to deduct amount towards the PF and deposit the same with the Central Government. The appellant claimed that it has deducted the contributions on behalf of principal employer, that is recipient of the service, for remittance to the competent authority in terms of the provisions of EPF and ESI Act. The contributions made towards PF & ESI is, therefore, not required to be added for the purpose of calculation of the gross amount under Section 67 of the Act, if the same has been deposited with the Government - the appellant is entitled for the abatement towards the payment made on account of contribution towards ESI, EPF and PF and also towards wages and salaries while computing the assessable value in terms of Section 67 of the Act for the payment of service tax - the impugned order is set aside and matter remanded to the original adjudicating authority for re-determination of the service tax required to be paid by the appellant. In addition to service tax payable, the appellant will be liable to pay interest and penalty on the re-determined service tax liability - since the appellant failed to deposit the service tax even after collection so the case of waiver of penalty under Section 80 of the Act is not made - the appeal is partly allowed by way of remand

Create Account

Log In

Forgot Password

Please Note: This facility is only for Subscribing Members.

Email this page