SERVICE TAX
67% Service Tax Abatement Cannot Be Denied For Omission In ST-3 Returns: CESTAT Kolkata
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 22 May held that substantive benefit of 67% abatement under Notification No. 1/2006-ST cannot be denied merely because the taxpayer failed to claim the benefit in its ST-3 returns, particularly when the record admitted use of materials in execution of construction services. Judicial Member Ashok Jindal and Technical Member K. Anpazhakan set aside the service tax demand, interest and penalty imposed on Singh...
Exporter Can't Be Denied CENVAT Credit Solely For Lack Of Service Tax Registration: CESTAT Hyderabad
The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax registration is not a pre-condition for taking CENVAT credit where a taxpayer was exclusively engaged in the export of services and not liable to pay service tax. A bench of Judicial Member Angad Prasad and Technical Member A.K. Jyotishi held a plain reading of the statutory framework did not support the department's stand that such credit could be denied solely because the taxpayer...
CESTAT Chandigarh Holds Credit Card Cashback Incentives Not Taxable, Upholds Relief To Tek Travels
The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 14 May held that cashback incentives received from banks on the use of commercial credit cards for airline ticket bookings do not constitute consideration for any taxable service under the Finance Act, 1994. Judicial Member S.S. Garg and P. Technical Member Anjani Kumar upheld the Commissioner's order dropping the service tax demand of Rs. 8.03 crore raised against Tek Travels Pvt. Ltd. on cashback...
Landlord Cannot Recover Service Tax From Tenant Without Express Clause In Lease: Delhi High Court
The Delhi High Court has ron Thursday held that a landlord cannot recover service tax from a tenant in the absence of an express covenant in the lease deed imposing such liability on the tenant. Justice Neena Bansal Krishna dismissed an appeal filed by landlords against a decree directing refund of ₹5.53 lakh deducted from the tenant's refundable security deposit towards alleged service tax dues.The dispute arose between Sunrider India Pvt Ltd and the landlords in relation to a commercial...
IOCL's Terminal Facilities For Crude Oil Storage At Barauni Attract Service Tax: Patna High Court
The Patna High Court has held that terminal facilities used by IOCL's Barauni Refinery for storing crude oil before onward transportation constituted an independent taxable service liable to service tax, and were not merely incidental to pipeline transportation. The court ruled, “If MOU creates a provision of a separate charge for 'discharge facility' or 'terminal facilities' or 'storing of crude oil' before entering into next phase of transportation for Bongaigaon Refinery then, it cannot be...
CESTAT Allahabad Quashes ₹77 Cr Demand On Samsung, Holds Mere Foreign Payments Do Not Trigger Service Tax
On 19 May, the Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that service tax under the reverse charge mechanism cannot be levied merely on the basis of payments made in foreign currency, and that the Department must first establish receipt of a taxable service. Judicial Member P.K. Choudhary and Technical Member P. Anjani Kumar set aside service tax demands exceeding Rs 77 crore raised against Samsung Electronics India Pvt. Ltd. for the period July...
CESTAT Delhi Quashes Service Tax Demand On Indian Unit Over Foreign Parent's Un-Invoiced Allocations
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), New Delhi has quashed a Rs 1.88 crore service tax demand raised on an Indian subsidiary over un-invoiced allocations reflected in its foreign parent company's internal accounting system. The Tribunal found that the disputed amounts did not relate to any service rendered to the subsidiary and involved no consideration. A coram of Judicial Member Binu Tamta and Technical Member P. V. Subba Rao dismissed appeals filed by the...
HAL Need Not Pay Service Tax On Technology Transfer From Russian Agency For SU-30 Production: CESTAT Hyderabad
The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that Hindustan Aeronautics Limited (HAL) was not liable to pay service tax under the reverse charge mechanism on payments made to Russian state agency Rosoboronexport. The payments are related to the transfer of technology and technical assistance for the manufacture of SU-30 MKI aircraft in India. The ruling was delivered by a bench comprising Judicial Member Angad Prasad and Technical Member A.K....
CESTAT Delhi Sets Aside Rs 33.88 Lakh Service Tax Demand Against Gurbani Constructions
The Principal Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, has set aside a service tax demand of over Rs.33 lakh against Gurbani Constructions over alleged taxable construction activities and purported additional payments from a hotel client. A bench of Judicial Member Dr. Rachna Gupta and Technical Member P.V. Subba Rao held that the department could not sustain the demand without evidence. “He who asserts has to prove” and if a show cause notice is...
Service Export Refund Claims Limitation Runs From Foreign Exchange Receipt, Not Quarter-End: CESTAT Hyderabad
The Hyderabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the one-year limitation for refund claims by exporters of services runs from the date of receipt of foreign exchange remittance, and not from the end of the relevant quarter. A coram of Judicial Member Angad Prasad and Technical Member A.K. Jyotishi was interpreting the amended refund notification applicable to service exporters from March 2016, and held, "We, therefore, find that a plain...
Roads In Jaipur Industrial Park Qualify As Public Roads, CENVAT Credit Not Admissible: CESTAT New Delhi
The New Delhi Principal Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) on 15 May held that roads constructed within Krishna Kunj Pvt. Ltd.'s “Solitaire Industrial Park-II” at Jaipur were meant for use by the general public and qualified for exemption under Notification No. 25/2012-ST. Judicial Member Binu Tamta and Technical Member P.V. Subba Rao partly allowed the appeal filed by Krishna Kunj and upheld denial of CENVAT credit on merits but remanded the matter to...
Stock Broker's Charges For Clients' Delayed Share Payments Not Service Taxable: CESTAT Hyderabad
The Hyderabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has partly allowed Steel City Securities Ltd.'s appeal against a service tax demand on delayed payment charges collected from clients, setting aside the demand relating to stock broking transactions while upholding the levy on delayed payments linked to DEMAT account services.A bench of Judicial Member Angad Prasad and Technical Member A.K. Jyotishi held that delayed payment charges collected for late...