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TMI BlogNo service tax on ancillary services for sale of goods when included in the full invoice valueX X X X Extracts X X X X X X X X Extracts X X X X ..... No service tax on ancillary services for sale of goods when included in the full invoice value X X X X Extracts X X X X X X X X Extracts X X X X ..... ed where Value Added Tax (VAT) was paid on sale of goods. Facts: M/s. Jivan Jyot Motors Pvt. Ltd. ("the Appellant") is automobile dealer engaged in the business of purchase and sale of vehicles to the customers. The Appellant while selling vehicle, charges handling and forwarding charges on invoice and charges VAT @ 12.5% on the total value of the invoice including charges of handling and forwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding. The Revenue Department was of the view that handling and forwarding charges collected by the Appellant are liable to service tax under the head of Business Auxiliary Service ("BAS"). Thereafter, a Show Cause Notice ("the SCN") was issued to the Appellant. The Appellant submitted that SCN is confusing that could not conclude that whether the activity handling and forwarding charges is fall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing under the category of BAS and also submitted that handling and forwarding charges is part of the total sale value of the goods on which VAT was already paid, therefore any element which is part of the sale on which VAT is paid, service tax cannot be demanded. Aggrieved by the Impugned order the Appellant filed an appeal before the CESTAT, Ahmedabad. Issue: Whether demand of service tax is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustainable on forwarding services, where the whole amount including the forwarding charges were subjected to VAT? Held: The CESTAT, Ahmedabad in JIVAN JYOT MOTORS PVT LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, SURAT - 2023 (7) TMI 1178 - CESTAT AHMEDABAD held as under: * Opined that, forwarding charges are nothing but part of the sale value of the vehicle sold by the Appellant to thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r customer, and sale value consists of various elements and the same cannot be bifurcated. * Relied upon the judgement of the Hon'ble Supreme Court in the case of COMMISSIONER OF SERVICE TAX-V, MUMBAI VERSUS UFO MOVIEZ INDIA LTD. - 2022 (7) TMI 1064 - SUPREME COURT wherein the court held that since VAT has been paid on the sale of goods, the question to demand service tax thereon does not arise. ..... X X X X Extracts X X X X X X X X Extracts X X X X .....
* Clarified that, 12.5% VAT is to be calculated on the total value i.e., basic price plus forwarding charges and paid to the concerned State authorities.
* Held that, when there is sale of goods and VAT was paid no service tax can be demanded.
* Set aside the Impugned order.
(Author can be reached at [email protected]) X X X X Extracts X X X X X X X X Extracts X X X X ..... fessionals ..... X X X X Extracts X X X X X X X X Extracts X X X X
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