PRICE WATERHOUSE Vs. COMMISSIONER OF SERVICE TAX

JUDGEMENT

(1.) LEVY of service tax of Rs. 2,20,000 together with interest and penalties imposed under the provisions of Sections 76, 77 and 78 of the Finance Act, 1994 by the authorities below is challenged in the present appeal filed by the appellants who are Practising Chartered Accountants. Tax has been levied on "certification services", holding that it is an 'auditing service' and therefore, not entitled to exemption in terms of -ST, dated 16 -10 -1998.

(2.) I have heard both sides. The certification relating to computation of income from international transactions is in accordance with the provisions of Section 92E and Rule 10E of the Income -tax Act, 1961/Rules. Section 92E provides that every person who has entered into an international transaction during a previous year shall obtain a report from an accountant and furnish such report on or before the specified date in the prescribed form duly signed and verified in the prescribed manner by such accountant and setting forth such particulars as may be prescribed. Rule 10E stipulates that the report in terms of Section 92E should be in Form No. 3CEB. Audit report is required in terms of Section 224 of the Companies Act, 1956. A sample certificate under Section 92E of the Income -tax Act is reproduced hereinbelow: