SERVICE TAX
CESTAT Mumbai Sets Aside ₹46.41 Crore Service Tax Demand Against Yash Raj Films Over Overseas Film Shoots
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai, has ruled that overseas Local Area Representatives (LARs) who arrange third-party services for film shoots abroad act as intermediaries. Since the place of provision of these intermediary services was outside India, Yash Raj Films Private Limited was not liable to pay service tax under the reverse charge mechanism. The tribunal set aside a demand of ₹46.41 crore, along with interest and penalties.A bench of Judicial Member...
CESTAT Kolkata Holds Vodafone SIM Distributor Commission Exempt From Service Tax, Sets Aside Part Of Demand
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata, has ruled that commission earned from a Vodafone SIM distributorship was exempt from service tax under a 2012 notification.The tribunal also set aside the demand on plastic dustbins and portable toilets supplied to local bodies and State Governments, holding that the transactions involved sales of goods on which VAT had been paid.The ruling came in an appeal filed by Reliable Enterprises, a sole proprietorship based in...
Water Supply Agreement Is Sale Of Water, Not Taxable Service: CESTAT Delhi
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, has recently ruled that an agreement allowing an industrial unit to draw water directly from a water body can constitute a sale of water rather than an assignment of the right to use natural resources. The tribunal set aside a service tax demand of ₹7.29 crore against Bharat Aluminium Company Limited (BALCO), holding that the agreement was for the sale of water.A bench comprising Officiating President Rachna Gupta and...
Amounts Collected From Dhabas Under 'Yatri Plaza Yojna' Not Taxable To Service Tax: CESTAT Allahabad
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad, has set aside a service tax demand of ₹3.85 lakh against the Uttar Pradesh State Road Transport Corporation (UPSRTC) over amounts collected from roadside dhabas under its “Yatri Plaza Yojna”. The tribunal held that the arrangement was a public welfare measure to ensure passenger safety and convenience, not a commercial transaction involving a taxable service.Under the scheme, UPSRTC designated roadside dhabas where its...
Tender Documents Sale Not A Service, No Service Tax Payable On Fees: CESTAT Delhi
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), on 13 October held that fees collected for selling tender documents are not subject to service tax, as the sale of documents does not constitute a taxable service. A Bench of Judicial Member Ajay Sharma and Technical Member Hemambika R. Priya allowed the appeal filed by Rajasthan State Road Development & Construction Corporation Limited against a service tax demand of Rs. 72,071, along with interest and...
CESTAT Chennai Sets Aside Service Tax Orders Against A.P. Constructions, Orders Fresh Adjudication
On Thursday, 15 October, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) at Chennai, set aside three service tax orders against A.P. Constructions India Pvt. Ltd. and its Managing Director, directing fresh adjudication within 90 days after examining the contractual arrangements, applicable statutory provisions and supporting evidence. A Bench comprising Judicial Member P. Dinesha and Technical Member M. Ajit Kumar allowed all three appeals by way of remand, holding that the...
Airline Cancellation Charges Are Compensation For Breach Of Contract, Not Taxable Service: CESTAT Delhi
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, has ruled that cancellation fees collected by Lufthansa German Airlines as compensation for passengers failing to honour their travel commitments are not taxable as consideration for a separate service under Section 66E(e) of the Finance Act, 1994.“In short, the cancellation charges are in the form of a compensation for failure of a contract entered into that the passenger would fly and the airlines would carry him to...
VAT Payment Doesn't Exempt Fit-Out Charges From Service Tax, CENVAT Credit Allowed: Madras High Court
The Madras High Court on 12 October held that payment of Value Added Tax (VAT) on fit-out charges does not automatically exempt the same transaction from service tax. Further, a portion of the consideration for leased office premises must be attributed to fit-outs provided under the lease agreements. A Division Bench comprising Justices Anita Sumanth and C. Kumarappan upheld CENVAT credit claimed by Ascendas IT Park (Chennai) Ltd. on specified input services, while deciding an appeal filed by...
Service Tax | Delhi High Court Deprecates Practice Of Issuing Clarifications To Bypass Advance Ruling Mechanism
The Delhi High Court has deprecated the practice of service tax authorities issuing clarifications to bypass the statutory mechanism of advance rulings for determining tax liability.The Division Bench of Justices Avneesh Jhingan and Shail Jain made the observation while disposing of a writ petition filed by Bajaj Capital Ltd., which had challenged a 2007 communication issued by the Commissioner of Service Tax, Delhi, regarding the applicability of service tax to its activities.Bajaj Capital was...
Service Tax On Construction Services Payable On Actual Receipts, Not Accruals: CESTAT Kolkata
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata, has remanded a ₹11,98,511 service tax demand against Britannia Engineering Ltd., holding that liability for the relevant period must be calculated on actual receipts rather than accruals. The dispute covers financial years 2006-07 to 2008-09, spanning the introduction of Works Contract Service as a separate taxable category from June 1, 2007. “Service tax is to be discharged on the receipt of the amount,” a bench of...
TDS Paid By Indian Company For Foreign Service Provider Not Taxable As Service Value: CESTAT Bangalore
The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that TDS paid separately by an Indian company on behalf of a foreign service provider cannot be included in the taxable value for service tax purposes. This applies when the agreement requires the Indian company to bear the tax. A Bench of Judicial Member P.A. Augustian and Technical Member R. Bhagya Devi set aside a service tax demand of ₹13.49 lakh against Promac Engineering Industries Limited....
Tax Refund Cannot Be Claimed Without Challenging Or Modifying Self-Assessment: CESTAT Mumbai
On 8 October, the Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that a taxpayer cannot claim a service tax refund solely on the basis of a subsequent departmental clarification granting an exemption. The taxpayer must first challenge or modify the original self-assessment before seeking a refund of nearly Rs. 5.92 crore. A Bench comprising Judicial Member S.K. Mohanty and Technical Member Sanjiv Srivastava dismissed five appeals filed by Sodexo India and...