Thursday, May 5, 2016

Service tax can be levied on freight even if same is included in custom value of imported goods

Service Tax : There is no law that 'if customs duty is chargeable, Service Tax is not leviable on same component'; hence, service tax may be levied on imported service, even if customs duty was already paid thereon by inclusion in customs value
Service Tax : Expenditure or costs incurred by C&F Agent i.e., freight, insurance, loading, unloading, handling charges etc. are excluded from value, only if conditions enumerated in rule 5(2) of Service Tax Valuation Rules, 2006 are satisfied.

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An agricultural land couldn't be treated as non-agricultural land just because it was situated near a highway

a)    The assessee sold a land and claimed the same to be an agricultural land not being a capital asset within the meaning of section 2(14) of the Income-tax Act (‘Act’).
b)    The Assessing Officer (AO) opined that since the land was situated near a highway, it could not be considered as an agricultural land. Therefore, assessee was liable to pay tax on capital gain arising from sale of such land.
c)    CIT(A) reversed the order of the AO. Aggrieved by the order of the CIT(A), revenue filed the instant appeal before the tribunal.
The tribunal held in favour of assessee as under-

1)    The term 'agricultural land' is not expressly defined under the Act. In the case of CWT v. Officer-in-Charge (Court of Wards) [1976] 105 ITR 133 (SC), the Supreme Court held that the agricultural land must be a land which could be said to be either actually used or ordinarily used or meant to be used for agricultural purpose.