Cum Tax Benefit allowed

The Hyderabad Bench of the CESTAT has held that where service providers have not separately recovered service tax from their customers, the consideration received must ordinarily be treated as inclusive of tax and the benefit of cum-tax valuation must be extended. 

The Tribunal further ruled that the extended period of limitation and penalties cannot be invoked in the absence of evidence of fraud, suppression or wilful misstatement, particularly where the transactions were duly recorded in the statutory books and returns. 

The matter was remanded solely for re-quantification of the tax liability after extending cum-tax benefit and considering the TDS component.