M/S. Sujata Painters, Appeal No. 18 of 2013, decided on 9th March, 2015 by MSTT.

Facts
The appellant was engaged in business of execution of works contract of powder coating raised bill to the customer by charging vat on 80% of total contract value by deducting 20% amount prescribed in rule 58 for labour and services and also charged service tax @ 12.36% on 40 % of total contract value. He applied to the Commissioner of Sales Tax for determination of disputed question u/s. 56 of the act whether amount collected by way of service tax forms part of sale price. The Commissioner of Sales Tax held that the amount collected by way of service tax forms part of sales price. The appellant filed appeal, against the said order of Commissioner, before The Maharashtra Sales Tax Tribunal.

Held
Service tax is leviable on service value. It has no relation to the goods. It is independently leviable on value of services under the Finance Act. So on a plain reading of inclusive part of the definition of “sales price” u/s. 2 (25) of the Act, the service tax could not form part of sale price. The service tax and vat are mutually exclusive. Therefore by no stretch of imagination service tax would be a part of sale price. Accordingly, the appeal was allowed and levy of vat on service tax amount was set aside and deleted.