SERVICE TAX
University Income From Rentals, Not Exempted From Service Tax: Karnataka High Court
The Karnataka High Court has held that the university is liable to pay service tax on the income earned from the rentals of buildings leased or licensed for banking facilities.The bench of Justice Krishna S. Dixit and Justice Ramachandra D. Huddar has observed that when the university rents out its property for running a bank, the profit motive is abundant. It is not the case of the university that the banking services are agreed to be provided on a 'no profit, no loss basis' by prescribing a...
No Service Tax Payable On Construction Services Provided To Educational Institutions Prior To 30.06.2012: CESTAT
The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax is not payable on the construction services provided to educational institutions for the disputed period, which is prior to 30.06.2012.The bench of Sulekha Beevi.C.S. (Judicial Member) and Vasa Seshagiri Rao (Technical Member) have observed that when the building is solely used for educational purposes, the levy of service tax is not attracted. We, therefore, find that the building having...
CESTAT Quashes Service Tax Demand On Insurance Auxiliary Service And Short Account Of Insurance Premium Income
The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has quashed the service tax demand on insurance auxiliary services and short accounts of insurance premium income.The bench of Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member) has observed that the CENVAT credit of the group health insurance policy for the employees cannot be denied to the assessee, Oriental Insurance Company.The appellant/assessee is a company incorporated under the...
No Service Tax Payable By CIPLA On Manufacturing And Exporting Of Pharmaceutical Products: CESTAT
The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that no service tax is payable by Cipla on the manufacturing and export of pharmaceutical products.The bench of Binu Tamta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that the respondent-assessee is a holder of a letter of approval issued by the Development Commissioner for the manufacture of pharmaceutical products within the Special Economic Zone, Pithampur, Indore. The...
Co-Owners Holding Immovable Property To Be Treated As Independent Service Provider For Service Tax Exemption: CESTAT
The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that co-owners holding immovable property should be treated as independent service providers for the purpose of availing service tax exemption.The bench of Ramesh Nair (Judicial Member) and C.L. Mahar (Technical Member) has observed the decision in the case of Sarojben Khushalchand versus Commissioner of Service Tax, in which it was held that the rent received by individuals owning property jointly...
Activity Of Electroplating Amounts To Manufacture, No Service Tax Payable: CESTAT
The Chandigarh Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the activity of electroplating amounts to manufacture and no service tax is payable.The bench of S. S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) has observed that electroplating of electrical contacts by the appellant amounts to manufacture, and therefore they are not liable to pay service tax in view of the specific exclusion in the definition of business auxiliary service,...
CESTAT Quashes Service Tax Demand On Housekeeping Services Provided To UN Agencies
The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has quashed the service tax demand in respect of housekeeping services provided to UN agencies and educational institutions.The bench of Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that the exemption to the United Nations is general in nature, and services provided to UNDP, UNICEF, UN Women, UNAIDS, UNODC, and UNOPS are available on the basis of Mega Exemption Notification...
Service Tax Exemption On Quality Assurance Charges for Testing Rifles: CESTAT
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that no service tax is payable on the quality assurance charges for testing rifles.The bench of P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) has observed that the assessee is engaged in an activity that is purely in the public interest and is undertaken as per mandatory and statutory functions. He drew attention to Rule 22 of the Arms Rules, 1962, which states that proof testing of...
Supreme Court Dismisses UP Govt.'s Appeal Against Allahabad HC Order Quashing Demand Of Rs. 235.52 Crores Against VIVO
On Thursday(January 4), the Supreme Court dismissed a Special Leave Petition filed by the State of Uttar Pradesh against the order of the Allahabad High Court quashing the demand of Rs. 235.52 Crores raised against Vivo Mobile India Private Limited raised by GST Authorities vide order under Section 74(9) of the Goods and Service Tax Act 2017.In the peculiar facts of the case, the bench comprising of Justice B.V. Nagarathna and Justice Augustine George Masih refused to interfere with the order of...
No Service Tax Applicable on User Development Fee collected From Passengers by Delhi, Mumbai and Hyderabad International Airports: Supreme Court
The Supreme Court has ruled that “user development fee” (UDF) levied and collected by the airport operation, maintenance, and development entities from passengers departing the concerned airports, is a statutory levy, and thus, it is not subjected to levy of service tax under the provisions of the Finance Act, 1994.The bench comprising Justices S. Ravindra Bhat and Dipankar Datta were hearing an appeal against the decision of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), who...
In 'Works Contract', Assessee Liable To Pay Service Tax On Service Element & Sales Tax On Goods Transferred : Supreme Court
The Supreme Court has ruled that the value of the service portion in the execution of the works contract has to be determined as per Rule 2A of Service Tax (Determination of Value) Rules, 2006, or as per the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 (Composition Scheme), if adopted by the assessee, and that the assessee has to pay service tax on the service element and can claim CENVAT Credit only on the said amount.The bench of Justices M. R. Shah and Krishna...
Same Activity Can Be Taxed As ‘Goods’ & ‘Services’ : Supreme Court Upholds Levy Of Service Tax On “Engineering Design & Drawings”
The Supreme Court has held that the import of “Engineering Design & Drawings” falls under the category of “design services” under section 65(35b) read with Section 65(105) (zzzzd) of the Finance Act, 1994, and are subject to levy of service tax. On the sole ground that “Engineering Design & Drawings” prepared and supplied by sister company were shown as ‘goods’ under the Customs Act and in the bill of entry, such services cannot be excluded from the definition of “design services” under...