GST Collected by Non-Resident Co. Not Included in Gross Receipts for Income Computation u/s 44BB | ITAT

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Income Computation u/s 44BB

Case Details: Oceaneering International GMBH vs. Deputy Commissioner of Income-tax (International Taxation) - [2025] 173 taxmann.com 313 (Mumbai-Trib.)

Judiciary and Counsel Details

  • Amit Shukla, Judicial Member & Vikram Singh Yadav, Accountant Member
  • Abdul Kadir Jawadwala, for the Appellant.
  • Krishna Kumar, Sr. DR for the Respondent.

Facts of the Case

The assessee, a non-resident Swiss company, provides equipment and services for oil and gas drilling operations in India. It filed its return of income for AY 2021–22 under the presumptive scheme of Section 44BB, offering gross receipts of Rs. 92.44 crores.

Rs. 13.10 crores in goods and service tax (GST) collected from customers was not included in gross receipts, as the assessee claimed it was collected in a fiduciary capacity on behalf of the Government.

Assessing Officer (AO), relying on Section 145A and certain judicial precedents, included GST in gross receipts under Section 44BB and made additions accordingly.

Dispute Resolution Panel (DRP) upheld the AO’s view. The matter reached before the Tribunal.

ITAT Held

The Mumbai Tribunal held that GST is a statutory levy collected on behalf of the Government and does not represent the assessee’s income. It cannot be treated as part of gross receipts for the purposes of computing deemed income under Section 44BB. Section 44BB overrides general provisions, and income should only be computed on amounts received for services and not taxes collected.

The Tribunal distinguished GST from business receipts, emphasised its fiduciary nature, and applied the principle that including GST in the assessee’s income would amount to taxing a tax. It also followed the decisions of Coordinate Benches and held that GST, shown as a separate line item in invoices, must be excluded from gross receipts.

Accordingly, the tribunal directed the deletion of the addition of Rs. 13.10 crores towards GST.

List of Cases Reviewed

  • Orient Overseas Container Line Limited v. DCIT (International Taxation) in ITA no. 3278/MUM/2023
  • Seadrill International Ltd. v. ACIT (IT)-4(2)(1) in ITA No. 4700/MUM/2023 dated 07.01.2025 [Para 12] followed.

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied