2018 (3) TMI 1428 - AT - Service Tax

Scope of Service Tax Act - State of Jammu and Kashmir - GTA Service - reverse charge mechanism - Held that - provisions of service within the state of Jammu & Kashmir is beyond scope of Chapter No. V of the Finance Act, 1994. Therefore, no provision related to Service Tax Law is presently applicable to services rendered in the state of Jammu & Kashmir - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Applicability of service tax on services rendered in Jammu & Kashmir under Reverse Charge Mechanism.

Analysis:
The appeal was directed against an Order-in-Original passed by the Commissioner of Service Tax, Noida, alleging that the appellant, dealing with petroleum products, did not reflect services received in Jammu & Kashmir for GTA Services in their ST-3 return. The Revenue claimed the appellant should have paid service tax under the Reverse Charge Mechanism. The appellants argued that service tax cannot be levied on services rendered in Jammu & Kashmir as per Section 64 of the Finance Act, 1994. The Revenue contended that the recipient of the service is liable to pay service tax under the Reverse Charge Mechanism.

Upon examining the contentions and relevant provisions, the Tribunal found that services rendered within Jammu & Kashmir fall beyond the scope of Chapter V of the Finance Act, 1994. Consequently, no provision related to the Service Tax Law is applicable to services provided in Jammu & Kashmir. As a result, the Tribunal allowed the appeal, setting aside the Order-in-Original, and ruled in favor of the appellant. The appellant was granted consequential relief as per the law.

This judgment clarifies the non-applicability of service tax on services provided in Jammu & Kashmir under the Reverse Charge Mechanism, emphasizing the exclusion of such services from the scope of the Finance Act, 1994. The decision provides a significant interpretation of the law regarding the taxation of services in specific regions and highlights the importance of aligning tax liabilities with the relevant legislative provisions.