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 of Collection of Toll

Posted by on in Service Tax
  • Font size: Larger Smaller
  • Hits: 803
  • Subscribe to this entry
  • Print
  • Report this post



Service Tax – Demand of service tax on services of collection of toll on behalf of MSRDC for which appellants were, as per the contract terms, allowed to retain part of the toll collected as consideration for such service provided to the corporation – demand under ‘Business Auxiliary Service’ - Section 65 (105) (zzb) of the Finance Act, 1994

HELD - The Respondents being the suitable bidder were given right to collect the toll and under the terms and conditions of such auction, the Respondents-assessee were liable to pay the bid amount to NHAI/ MSRDC. Such bid price which the Respondents were liable to pay to the NHAI/ MSRDC was in no way connected with the collection of toll or quantum of toll amount.

The Respondents had to pay NHAI / MSRDC the bid amount irrespective of the fact whether such activity would earn him profit or loss. The NHAI/ MSRDC were in no way concerned with the collection made by the assessee - the activity of toll collection by the assessee was not on behalf of NHAI/ MSRDC but on their own account once they had secured the right to collect the toll - the activity of NHAI/ MSRDC is of developing, maintaining and management of national state highways which is a statutory function. They have not been engaged in the said activity as the business.

In such case it cannot be said that the assessee has been providing auxiliary service to any business – further, the toll is not collected by the assessee as representative or agent of NHAI/ MSRDC nor any commission in terms of quantum of amount or percentage is charged by the assessee from NHAI/ MSRDC - the difference between the toll collection and the bid amount paid by the assessee to M/s NHAI/ MSRDC in no way can be termed as consideration for any service - activity of the assessee cannot be considered as Business Auxiliary Service and cannot be taxed to service tax - the revenue appeal is unsustainable on merits and accordingly dismissed

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 Saturday, 20 July 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.