Printing of bills couldn’t be treated as ‘Business Auxiliary Services’

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Assessee was engaged in business of manufacture/import and sale of photocopiers, printers, scanners, fax machines, MEDs, etc.- Assessee undertook service activities of maintenance and repairs as per contract of Full Service Maintenance Agreements (FSMA), Spares and Service Agreements (SSMA), Volume Based Service Agreements (VBSA) and Annual Maintenance Contracts (AMC)  For said agreements, assessee charged service tax on standard percentage of labour deduction allowed under State Sales Tax/VAT provisions and deposited same.

Adjudicating authority held that assessee was liable to pay service tax on gross amount received from customers. It was noted that assessee was liable to pay VAT/Sales Tax on material portion of said contract, as per various State VAT Act and, therefore, those were works contracts.

 Whether on facts, since assessee was paying VAT on portion of materials supplied, it was liable to pay service tax only on labour portion – Held, yes

Whether where assessee was engaged in activity of printing of bill and not ‘Billing’, said printing of bill being altogether a different activity from billing, services in question did not qualify under category of ‘Business Auxiliary service’ – Held, yes

Citation: [2018] 93 423 (Chandigarh – CESTAT )