{"id":6805,"date":"2025-11-15T11:29:28","date_gmt":"2025-11-15T05:59:28","guid":{"rendered":"https:\/\/www.centaxonline.com\/blog\/?p=6805"},"modified":"2025-11-15T11:29:28","modified_gmt":"2025-11-15T05:59:28","slug":"education-cesses-chargeable-only-on-net-service-tax-cestat","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/education-cesses-chargeable-only-on-net-service-tax-cestat","title":{"rendered":"Education Cesses Chargeable Only on Net Service Tax | CESTAT"},"content":{"rendered":"<pre><strong>Case Detauils: <a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/excise-service-tax\/101010000000410152\/education-cesses-held-leviable-only-on-net-service-tax-not-on-amount-inclusive-of-rd-cess-cestat\">Maruti Suzuki India Ltd. vs. Commissioner of Central Excise and Service Tax, Gurgaon-II (2025) 36 Centax 24 (Tri.-Chan)<\/a><\/strong><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li><strong>S\/Shri S.S. Garg<\/strong>, Member (J) &amp; <strong>P. Anjani Kumar<\/strong>, Member (T)<\/li>\n<li><strong>Ms Krati Singh<\/strong> &amp; <strong>Ms Samiksha Uniyal<\/strong>, Advocates, for the Appellant.<\/li>\n<li><strong>Mr Siddharth Jaiswal, Mr Narinder Singh<\/strong> &amp; <strong>Mr Yashpal Singh<\/strong>, Authorised Representatives, for the Respondent.<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>The assessee, a recipient of Consulting Engineering Services from a foreign service provider having no office in India, was issued show cause notices proposing recovery of Education Cess and Secondary and Higher Education Cess on Service Tax under a Best Judgment assessment in terms of Section 72 of the Finance Act, 1994. The Department contended that the cess should be computed on the gross Service Tax amount inclusive of Research and Development (R&amp;D) Cess, whereas the assessee submitted that such cesses were leviable only on the net Service Tax component. The dispute arose out of the Department\u2019s computation method for determining the assessable base for cesses under the provisions of Sections 72 and 73 of the Finance Act, 1994. The matter was accordingly placed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).<\/p>\n<h2><em>CESTAT Held<\/em><\/h2>\n<p>The CESTAT held that Education Cess and Secondary and Higher Education Cess were leviable only on the net Service Tax amount and not on the gross amount inclusive of R&amp;D Cess. It observed that the issue was no longer res integra, as in the assessee\u2019s own earlier case, it had been judicially determined that these cesses were to be calculated solely on the Service Tax component actually payable. The Tribunal therefore applied the same reasoning and rejected the Department\u2019s contention that inclusion of R&amp;D Cess formed part of the taxable base for computation of the Education Cess and Secondary and Higher Education Cess. Accordingly, the demand computed on the gross Service Tax amount inclusive of R&amp;D Cess was set aside.<\/p>\n<h2><em>List of Cases Cited<\/em><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2023%20(386)%20E.L.T.%20192%20(SC)&amp;itemType=AP\">Commissioner v. S.S. Engineers<\/a> \u2014 2023 (386) E.L.T. 192 (SC) \u2014 Relied on [Paras 4.1, 7]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=(2023)%208%20Centax%20184%20(S.C.)&amp;itemType=AP\">Commissioner v. Rosmerta Technologies Ltd<\/a> \u2014 (2023) 8 Centax 184 (S.C.) = 2023 (385) E.L.T. 808 (SC) \u2014 Relied on [Paras 4.1, 7]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2025%20(1)%20TMI%2078%20CESTAT%20Chandigarh&amp;itemType=AP\">Maruti Suzuki Ltd. v. Commissioner<\/a> \u2014 2025 (1) TMI 78 CESTAT Chandigarh \u2014 Applied [Paras 4, 6, 7]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=(2023)%208%20Centax%20183%20(Tri.%20Chan.)&amp;itemType=AP\">Rosmerta Technologies Ltd v. CCE<\/a> \u2014 (2023) 8 Centax 183 (Tri. Chan.) \u2014 Relied on [Paras 4.1, 7<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Case Detauils: Maruti Suzuki India Ltd. vs. Commissioner of Central Excise and&hellip;<\/p>\n","protected":false},"author":8,"featured_media":6810,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49,51,63],"tags":[],"class_list":["post-6805","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-excise-service-tax","category-news-excise-service-tax","category-est-case-chronicles"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Education Cesses Chargeable Only on Net Service Tax | CESTAT<\/title>\n<meta name=\"description\" content=\"CESTAT holds Education Cess and SHE Cess are leviable only on net Service Tax and not on amounts inclusive of R&amp;D Cess; demand computed on gross value set aside.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.centaxonline.com\/blog\/education-cesses-chargeable-only-on-net-service-tax-cestat\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Education Cesses Chargeable Only on Net Service Tax | CESTAT\" \/>\n<meta property=\"og:description\" content=\"CESTAT holds Education Cess and SHE Cess are leviable only on net Service Tax and not on amounts inclusive of R&amp;D Cess; 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