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2013 (10) TMI 1210 - AT - Service TaxAppropriate rate of tax - Works Contract Service - whether the applicable rate of service tax would be rate in force at the time of realisation of the consideration or would it be the rate of tax which was in force at the time of the rendition of the taxable service - Held that - Service Tax is leviable on the rendering of services. Therefore, it is the rate prevalent on the date of rendering of the service, which is relevant for levy of Service Tax. The Board s instruction and also the decision of the Tribunal in the case of Ashok Kumar Jain (2012 (9) TMI 202 - CESTAT, NEW DELHI) confirm this view. Recently, the Hon ble High Court of Delhi in the case of Ratan Singh Builders Pvt. Ltd. 2013 (5) TMI 450 - DELHI HIGH COURT held that the rate that should be applied for levy of Service Tax is the rate prevalent on the date of rendering the services and not the rate applicable on the date of receipt of payment. Following these decisions, which apply to facts of the present case - Decided in favour of assessee.
Issues:
Service tax demand on commercial training or coaching services rendered by the appellant. Applicability of the rate of Service Tax based on the date of rendering the service. Analysis: The appeal involved a service tax demand of Rs.20,296/- on commercial training or coaching services provided by the appellant during a specific period. The appellant, Mercedes Benz India Ltd., contested that they should be liable to pay Service Tax at 8% for services rendered before a certain date and 10% for services provided thereafter, irrespective of the billing date. However, this contention was rejected, leading to the confirmation of the Service Tax demand, which prompted the appeal. During the hearing, the appellant's representative referred to Board's Circular no. 62/11/2003-ST, emphasizing the principle that service tax can only be charged under the authority of law, and if the levy of service tax on a service comes into force on a particular date, the service will not be taxable if rendered before that date. Additionally, Rule 6 of the Service Tax Rules, 1994 was cited to support the argument that the date of service rendered, not the receipt of payment, is crucial for determining tax liability. A Tribunal decision was also mentioned to strengthen their case. The Revenue's representative reiterated the lower appellate authority's findings, leading to a careful consideration of both sides' submissions. The Tribunal emphasized that Service Tax is leviable on the actual rendering of services, making the rate applicable on the date of service provision crucial for taxation. Referring to previous decisions and a High Court ruling, the Tribunal concluded that the rate prevailing on the date of service provision should be applied for the levy of Service Tax, not the rate at the time of payment receipt. Consequently, the appeal was allowed, with any consequential relief to be granted in accordance with the law. In summary, the judgment addressed the issue of service tax liability on commercial training or coaching services, emphasizing the importance of the rate of Service Tax based on the date of service provision rather than the billing or payment date. The decision was supported by legal principles, circulars, rules, and precedents, ultimately resulting in the appeal being allowed in favor of the appellant.
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