Service Tax Payable On Service Charges Collected From Client For Printing: CESTAT

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has ruled that service tax is payable on service charges that are collected from a client for printing services. The case involved a printer who was charging their clients a consolidated amount that included the cost of printing as well as a service charge component. The printer had argued that the service charge should not be subject to service tax. However, the CESTAT held that the service charge is a part of the gross amount charged for the provision of the printing service. Since the printing activity itself was a taxable service, any additional charge collected in relation to that service, such as a service charge, would also form part of the taxable value and would be liable for service tax under the erstwhile law.