The Customs, Excise and Service Tax Appellate Tribunal, the Kolkata bench in the case observed and has held that the value of the sale of books cannot be included in the value of coaching services and the service tax is not payable in the case.
The bench comprising of Judicial Member, P.K. Choudhary and the Technical Member, K. Anpazhakan in the case observed and has stated that since the value of the sale of books being separately identifiable from the audited financial statements of the Appellant and there being such documents to show that such sale was also made not to the students but to third parties also and the question for the levy of service tax on such value from the sale of books or publication cannot be sustained.
In the present case, the assessee or applicant is engaged in providing coaching services to aspiring students for qualifying for the competitive entrance examinations into the engineering and the medical institutes and the same is being registered under the service tax regime.
The Applicant in the case issued the show cause notice dated 24.09.2018 wherein it is alleged that the non or short payment of service tax on coaching services on the basis of the documents which are seized by the department.
It has also been alleged by the department in the said case that the appellant has artificially bifurcated the consideration which is received towards coaching services into other categories such as Income from Bag trade, the prospectus or form and the Publication Section L. Thus, it was alleged that the Appellant is also being liable to pay service tax on consideration received towards Publication Section L, major being the income from the sale of publication section L. Therefore, the Appellant has reported less turnover in their audited financial statement for certain years and the demand came to be calculated on the basis of the documents seized by the department wherein ignoring the audited financial statements.
However, it has been stated by the appellant in the case that the value of the sale of books cannot be included in the value of coaching services as it was the sale of goods and the same cannot be taxed as per the Notification dated June 20, 2003.
In the said case the issue raised before the court was weather the income from the sale or publication of books has to be added to the consideration for coaching services as it is provided by the Appellant.
Accordingly, the Tribunal set aside the order imposing the service tax and the court allowed the appeal of the assessee.