CBEC Circular No. 179/5/2014-ST dated 24 September 2014

The CBEC has issued clarification on the levy of service tax on:

  1. Taxable services provided by the members of the Joint Venture (JV) to the JV and vice versa  and inter se between the members of the JV - JV and the members of the JV are treated as distinct  persons and thus taxable services, provided for consideration, by the JV to its members or vice versa and between  the members of the JV are taxable
  2. Taxation of cash calls or capital contribution made by the members to the JV - If cash calls  are merely a transaction in money, these are excluded from the definition of service provided in section 65B(44) of the Finance Act, 1994. This would depend upon  the terms of JV agreement and may vary from case to case
  3. Administrative services provided by a member to the JV – Service tax would be attracted if  the member is rendering  taxable  service  and  receiving  consideration from the JV, either in  cash or kind

CENVAT credit of GTA services

The Chhattisgarh HC has held that in case of sale at the place of destination, an assessee is only  entitled to claim cenvat credit on service tax paid for the GTA service provided amount paid was  integral part of the price of the goods. If the amount paid for the GTA service is not included in the price of the goods, Cenvat credit cannot be claimed for the same

[Lafarge India Ltd V CCE (2014-TIOL-1720-HC-Chhattisgarh-CX)]

Goods imported by 100% EOU used for research and development   activity

The Tribunal has held that the benefit of importing raw material without payment of duty for  manufacture of goods by a 100% EOU cannot be denied on the ground that the raw material is not used  for the manufacture of final product but used for research and development activities as the  research and development facility is within the EOU.

[Serum Institute of India Ltd V CCE (2014-TIOL-1887-CESTAT- MUMBAI)]