Monday, 22 March 2010

Service tax not applicable on sale component of consideration for photography service

As the photography is in the nature of works contract and it involves the elements of both sale and service, therefore, the service tax is not leviable on the sale portion.
CASE LAWS DETAILS

DECIDED BY: HIGH COURT OF PUNJAB & HARYANA, IN THE CASE OF : CCE v. Vahoo Colour Lab., APPEAL NO: STA NOS. 19 OF 2009 AND 21 TO 25 OF 2009, DECIDED ON: FEBRUARY 3, 2010

RELEVANT PARAGRAPH

13. It is not a matter of dispute that processing of photography cannot be completed without the developing and printing process, to provide the service to the recipient. The photography films, printing papers, chemicals and envelopes are the integral and essential ingredients to complete the process of photography. Meaning thereby, the components of sale of photography, developing and printing etc. are clearly distinct and discernible than that of photography service. Therefore, we are of the view that as the photography is in the nature of works contract and it involves the elements of both sale and service, therefore, the service tax is not leviable on the sale portion, in the obtaining circumstances of the case.

14. No other point, worth consideration, has been urged or pressed by the learned counsel for the appellant.

15. In the light of the aforesaid reasons, as no other infirmity has been pointed by the learned counsel for the appellant, therefore, the impugned order of the Tribunal is hereby maintained. Consequently, the instant appeals are hereby dismissed, with no order as to costs.

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