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2020 (12) TMI 487 - NATIONAL ANTI-PROFITEERING AUTHORITY The Respondent was found to have denied the benefit of GST rate reduction to customers by increasing base prices, resulting in a profiteered amount of Rs. 7,49,27,786. The Respondent was directed to deposit this amount in the Consumer Welfare Funds of the Central and State Governments with 18% interest and to reduce prices accordingly. No penalty was imposed due to the retrospective inapplicability of penalty provisions.
2015 (3) TMI 748 - CESTAT NEW DELHI (LB) The Tribunal held that service elements in a composite works contract classifiable under Commercial or Industrial Construction Service (CICS), Construction of Complex Service (COCS), or Erection, Commissioning or Installation Service (ECIS) are subject to service tax even before the insertion of sub-clause (zzzza) in Section 65(105) of the Finance Act, 1994, on 01-06-2007. The Tribunal rejected the argument that works contracts were not taxable before this date, emphasizing the binding nature of the Delhi High Court's decision on the issue.
SERVICE TAX ON RESTAURANT: A SMALL AMENDMENT MAKES A BROADER SCOPE OF SERVICE TAX The service tax on restaurants, initially applicable only to those with liquor licenses and air conditioning, has been expanded to include all air-conditioned establishments, regardless of liquor licenses, effective April 1, 2013. This change arose from an amendment in the 2013-14 Union Budget. However, a persistent issue remains in the interpretation of the term "establishment," which some authorities apply to entire buildings rather than individual restaurants. This misinterpretation has led to disputes, as seen in cases where non-air-conditioned restaurants within larger air-conditioned facilities are taxed. The government has yet to address this ambiguity despite broadening the tax's scope.
EXEMPTION TO RESTAURANT SERVICES Services related to serving food or beverages by restaurants, eating joints, or messes are exempt from Service Tax unless they have air-conditioning or central heating at any time during the year and a license to serve alcoholic beverages. The exemption does not cover high-end restaurants with such facilities and licenses, which are taxed on the service component of their offerings. Notification No. 26/2012-ST allows a 30% abatement on bundled services from July 1, 2012, provided no Cenvat Credit is availed. Rule 2C determines the taxable service value in food supply activities, setting it at 40% for restaurants and 60% for outdoor catering.
Valuation. The valuation process for service tax under the new taxation regime based on a negative list. While the fundamental valuation approach remains unchanged, some modifications were made to align the valuation rules with the new system. Key changes include a unified scheme for works contract services under Rule 2A and a new Rule 2C for valuing services in food supply. The document details how to determine the value of taxable services, including services provided for monetary and non-monetary consideration, and addresses the inclusion or exclusion of costs in taxable value. It also discusses specific valuation rules for works contracts, money changing, and catering services, along with the implications of exemption notifications and compounding schemes.
2021 (12) TMI 165 - APPELLATE AUTHORITY FOR ADVANCE RULING, GUJARAT The Appellate Authority modified the Advance Ruling, determining that the product "fried - different shapes and sizes Papad" is classified under Tariff Item 19059040 of the Customs Tariff Act, 1975. The product is subject to 18% GST as per Schedule III, Entry No. 16 of Notification No. 1/2017-CT (Rate) and Notification No. 1/2017-IGST (Rate) dated 28.06.2017.
2022 (3) TMI 850 - AUTHORITY FOR ADVANCE RULING, RAJASTHAN The ruling determined that Mody Education Foundation's hostel services, including lodging and boarding, do not qualify for exemption under Entry No. 14 of Notification No. 12/2017-CTR. The services were classified as a mixed supply, with the highest GST rate applicable to any service in the bundle being applied to the entire supply. Therefore, the Foundation is not eligible for the exemption, and the GST rate will be determined based on the highest rate among the services provided.
2020 (2) TMI 1394 - CESTAT MUMBAI The Tribunal allowed the appeal, setting aside the demand for service tax. It held that the service tax exemption for canteen services applied to any party maintaining a canteen in a factory, not limited to canteens maintained by the factory owner. The decision was based on the interpretation of relevant notifications, emphasizing that the exemption should not be restricted based on the maintainer of the canteen. The Tribunal distinguished previous cases cited by the Revenue, stating they were not directly related to the exemption benefit.
FICCI-PRE-BUDGET-MEMORANDUM-2015-16 India's economic outlook improved in 2014-15, with GDP growth projected at 5.5-5.6%, up from below 5% in previous years. Inflation concerns eased, and the current account deficit was reduced. Export growth was steady, and foreign investment inflows increased significantly. The government introduced progressive policies to enhance the business environment, including infrastructure development, manufacturing support, and financial inclusion initiatives. The forthcoming budget aimed to boost demand and investments, with suggestions to extend investment allowances, support startups, and implement GST. The fiscal deficit was targeted to decrease, emphasizing revenue growth and efficient expenditure. The agriculture, chemicals, aviation, education, and healthcare sectors received specific recommendations for tax adjustments and policy reforms to support growth and competitiveness.
EXEMPTION TO FACTORY CANTEENS Services provided by factory canteens serving food or beverages are exempt from Service Tax if the canteen is air-conditioned or air-heated, as per Notification No. 14/2013-ST effective from October 22, 2013. This exemption applies to canteens in factories governed by the Factories Act, 1948, regardless of whether the facility is air-conditioned throughout the year. The exemption does not apply to canteens in offices or other locations. The definition of a "factory" includes premises with ten or more workers using power or twenty or more without power, engaged in manufacturing processes.
2012 (9) TMI 929 - ITAT PUNE The Tribunal upheld the CIT(A)'s decision to treat rental income from Cyber City as business income, allowing the depreciation claim. It also permitted the deduction under Section 80-IB(10) for the Heliconia project despite statutory disallowances. The Tribunal ruled in favor of allowing the deduction for eligible buildings within the Cosmos project, excluding the Prime building. Additionally, it held that combining adjacent flats should not impact Section 80-IB(10) deduction eligibility. The Revenue's appeal was dismissed, and the assessee's cross-objections were allowed.
2024 (6) TMI 1327 - CESTAT MUMBAI The Tribunal allowed the appeal, granting CENVAT Credit totaling Rs.3,77,843/-. It set aside the denial of CENVAT Credit on security services and commission/service charges of Rs.3,51,394/- and dismissed the alleged excess CENVAT Credit of Rs.26,449/-. However, the denial of CENVAT Credit on vehicle hire charges, vehicle expenses, and club membership charges amounting to Rs.14,231/- was upheld. The penalty imposed on the appellants was also set aside.
2022 (3) TMI 329 - CESTAT AHMEDABAD The Tribunal ruled that the appellant's sale of packed food as take-away does not constitute a service liable for service tax. The activity was deemed as purely a sale of food, not involving any service portion. Citing precedents, including a Madras High Court decision, it was established that service tax applies only to services provided in air-conditioned restaurants with additional amenities, not to the sale of take-away food. Consequently, the Tribunal set aside the demand for service tax, interest, and penalties, allowing the appeal with consequential relief.
2021 (6) TMI 226 - MADRAS HIGH COURT The court held that the provision of food from air-conditioned restaurants for take-away or in parcels does not attract service tax under the Finance Act, 1994. It was determined that such transactions constitute the sale of food and drink without a significant service component, as indicated by previous appellate decisions and a prevailing view within the tax department. As a result, the writ petitions were allowed, and the challenged orders were set aside.
2015 (2) TMI 1043 - JHARKHAND HIGH COURT The court upheld the Jharkhand Entertainment Tax Act, 2012, allowing the state to levy entertainment tax on DTH services, separate from the Union's service tax on broadcasting. The retrospective application of the Act was validated, with no prejudice found against the petitioners. The court dismissed claims of discrimination in tax rates between DTH and cable TV services, citing reasonable classification. However, it ruled that the cost of set-top boxes should be excluded from the taxable amount, applying the principle of severability. The writ petitions were dismissed, and interim orders vacated.
Refund of service Tax paid on Canteen Services. A company providing canteen services for factory workers, as required by the Factories Act, 1948, outsourced operations to an outdoor caterer who charged service tax from June 20, 2012, to October 22, 2013. The company seeks advice on eligibility for a refund under Section 11B of the Central Excise Act, 1944, and Section 83 of the Finance Act, 1994, citing a draft CBEC Circular and Notification No.25/2012-ST, which exempts non-air-conditioned canteens from service tax. A respondent confirms eligibility for a refund, noting the exemption applies to services without air conditioning or heating.
SERVICE TAX - AMENDMENTS PROPOSED IN CHAPTER V OF THE FINANCE ACT, 1994 Amendments to Chapter V of the Finance Act, 1994, propose changes to service tax regulations. Key updates include modifications to definitions related to vocational education and manufacturing processes, introduction of penalties for company officers, and new sections addressing arrest powers and cognizable offences. Retrospective exemptions are granted to Indian Railways for services prior to July 2012. The taxable portion for construction services is rationalized, and several exemptions are revised or withdrawn, including those for certain educational and transport services. An amnesty scheme is introduced for non-compliant service providers, and the scope of advance rulings is expanded.
2018 (5) TMI 560 - CESTAT BANGALORE The Tribunal remanded the case to the original authority for verification and examination of documents supporting refund claims. The original authority will decide the refund claims based on the Tribunal's findings. All appeals were allowed through remand.
The Chandigarh Commissionerate clarified that free home delivery or pick-up of food is not subject to Service tax, as the transaction is considered a sale rather than a service. This decision aligns with the Central Board of Excise and Customs' (CBEC) intention to exempt such transactions from Service tax, as they do not involve service elements like dining amenities. The clarification emphasizes that Service tax applies when food is served in a restaurant, not when delivered or picked up, which instead attracts VAT under state law. This clarification is crucial for consistent application across jurisdictions.
2015 (2) TMI 17 - DELHI HIGH COURT The court affirmed that the service income declared by the assessee was classified as business income, allowing for the deduction of royalty payments under Section 37(1) of the Income Tax Act, 1961. It held that the allocation of administrative expenses to the subsidiary was justified, disallowed depreciation on assets used by employees, classified food tasting and development expenses as revenue expenditure, and upheld the validity of provisional liability claims. The court ruled in favor of the assessee on all issues, dismissing the revenue's appeals.
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