2017 (1) TMI 1674 - AT - Service Tax

Levy of Service tax - advance received from the contractee against bank guarantee - no provision of taxable service was made by the appellant to receive such money - HELD THAT - Proposition of the appellant is correct when the scheme of Finance Act, 1994 is read. There should be incidence of levy that arises when there is provision of taxable service. That situation not having reached, there shall not be leviability of Service Tax on the Advance received - Appeal allowed - decided in favor of appellant.

Summary

The appellate tribunal in Chennai allowed the appeal stating that no Service Tax can be levied on the advance amount received by the appellant as there was no provision of taxable service made. The tribunal emphasized that the incidence of levy arises only when there is a provision of taxable service. The adjudicating authority may inquire about the period of adjustment of the advance amount to determine if Service Tax is applicable.