𝗖𝗘𝗦𝗧𝗔𝗧 𝗔𝗵𝗺𝗲𝗱𝗮𝗯𝗮𝗱 𝗥𝘂𝗹𝗶𝗻𝗴 𝗼𝗻 𝗦𝗲𝗿𝘃𝗶𝗰𝗲 𝗧𝗮𝘅 𝗮𝗻𝗱 𝗩𝗔𝗧 𝗼𝗻 𝗖𝗼𝗺𝗽𝗼𝘀𝗶𝘁𝗲 𝗖𝗼𝗻𝘁𝗿𝗮𝗰𝘁𝘀 📢 𝗧𝗵𝗲 𝗧𝗿𝗶𝗯𝘂𝗻𝗮𝗹 𝗵𝗲𝗹𝗱: "Service tax cannot be levied on the value of goods supplied under a composite contract if VAT/CST has been paid on the transfer of property in goods."

🔍 𝗙𝗮𝗰𝘁𝘀: 𝗖𝗼𝗺𝗽𝗮𝗻𝘆: Laxmi Engineering P Ltd 𝗜𝘀𝘀𝘂𝗲: Whether the value of goods supplied under a composite contract is includable in the taxable value for service tax purposes? 𝗔𝗰𝘁𝗶𝘃𝗶𝘁𝘆: The appellant provided services for "Erection, Commissioning, and Installation" and "Management or Repair," splitting contracts into service and supply portions. Service tax was paid on the service portion, and VAT/CST on the supply of goods.

⚖️ 𝗝𝘂𝗱𝗴𝗲𝗺𝗲𝗻𝘁: The Tribunal ruled that goods supplied under a contract, with VAT/CST paid, qualify as sales and are excluded from service tax. Notification No. 12/2003-S.T. exempts the value of goods sold from service tax without restrictions on the service recipient’s CENVAT credit. The appeal was allowed, and the demand set aside.

📜 𝗖𝗮𝘀𝗲 𝗜𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻: 𝗧𝗶𝘁𝗹𝗲: Laxmi Engineering P Ltd vs. C.S.T.-Service Tax – Ahmedabad 𝗦𝗲𝗿𝘃𝗶𝗰𝗲 𝗧𝗮𝘅 𝗔𝗽𝗽𝗲𝗮𝗹 𝗡𝗼.11143 of 2016 𝗢𝗿𝗱𝗲𝗿 𝗗𝗮𝘁𝗲: 06 April 2023 📜 This ruling confirms that service tax cannot be imposed on the supply of goods portion in composite contracts where VAT/CST has been paid.