Log in Register

Login to your account

Username *
Password *
Remember Me

Create an account

Fields marked with an asterisk (*) are required.
Name *
Username *
Password *
Verify password *
Email *
Verify email *
Captcha *
View more blog entries

Consult Construction

Consult Us For Construction

Service Tax Caselaw - No service tax applicable on services provided to Indian Navy

Posted by on in Service Tax
  • Font size: Larger Smaller
  • Hits: 357
  • Subscribe to this entry
  • Print
  • Report this post



Service Tax - mobilization advance from customer - Revenue that the amount received by the
appellant from Indian Navy for building facilities are in the nature of advance payments for
taxable services to be provided and liable to service tax – appellant stand that the amount is in the nature of a grant and to be amortized against future payments. Thus, it is the in the form of mobilization advance and not linked to any service provided or to be provided 

HELD - As far as the amounts received by the appellant from the Indian Navy for the purpose of upgrading their facilities are concerned, they are not linked to the present contract and hence can only be termed mobilization advances not linked to any signed contract for rendering services. Of course, in future Indian Navy may award the appellant contracts and the amounts now paid will be adjusted against such contracts. At this stage it is not clear as to what contracts will be signed and whether they will be liable to service tax during that period.
Therefore, there is no ground to charge service tax on the mobilization advance received by the appellant - no service tax is payable on the amount received towards mobilization advance of the contract from the Indian Navy. As far as the amounts received towards reimbursement of income tax and VAT paid including the TDS paid by the appellant and reimbursed by the Indian Navy are concerned, these are in the nature of reimbursable expenses and hence cannot be included in the value of taxable services. 

As far as the amounts received towards Repair Technical Documents (RTDs) are concerned, these are goods received by the appellant on behalf of Indian Navy and were imported by filing a bill of entry and no service tax can be levied on the goods - The impugned order is set aside and the appeal is allowed

Rate this blog entry:
Trackback URL for this blog entry.


  • No comments made yet. Be the first to submit a comment

Leave your comment

Guest Wednesday, 18 September 2019

Like us on facebook

Twitter Feed

ConsultC Please find the latest presentation given to select gathering of real estate developers at Kolkata on West Bengal H… https://t.co/Uizrcczy13
ConsultC Apart from the intricacies of the Forms and constant regulatory changes, GST has a lot of other aspects. We had an… https://t.co/YB1asAgU2s
ConsultC Second Edition of our book released with latest amendments upto September, 2018 https://t.co/eOwUcNZife


304, Super Plaza, Sandesh Press Road, Vastrapur, Ahmedabad
+91 - 079 - 40032950
This email address is being protected from spambots. You need JavaScript enabled to view it.

markerFind on Google Maps

Who we are

We are Ahmedabad based professional consulting firm. We are providing various services to Construction, Real Estate and Project Companies in various areas like Indirect Taxation – Service Tax & Multi state VAT consultancy, ERP implementation, Site & Management audit, Designing Tender & other related contractual documents etc.