9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (8) TMI 255 - AT - Service TaxDemand of service tax as a co-courier (co-loader) - appellants had realized service value from other couriers for providing service as co-courier (co-loader) - whether the appellant is liable to pay service tax as a co-loader? - Held that - The Department cannot contend that the clarification issued vide Circular dt. 23.08.2007 would be applicable to the disputed period - As per the 1996 Circular, it is categorically clarified by the Department that a co-loader is not chargeable to service tax - The Tribunal in the case of United Business Xpress India P. Ltd. 2016 (12) TMI 440 - CESTAT NEW DELHI has considered the very same issue and the applicability of both the Circulars. The issue was then held in favour of the assessee - the demand raised in respect of co-loader cannot sustain. Demand of service tax - reverse charge mechanism - Commission paid to foreign agent who delivered the couriers/packets booked by appellant to the foreign customers - Held that - The said issue is squarely covered by the decision in the case of First Flight Couriers Ltd. 2016 (8) TMI 145 - CESTAT MUMBAI , where it is held by the Tribunal that the role of the overseas entity commences and ends beyond the border of India and therefore, Rule 3 of Taxation of Service Rules has no application - demand do not sustain. Impugned order cannot sustain and requires to be set aside - appeal allowed - decided in favor of appellant.
Issues:
1. Liability to pay service tax as a co-loader. 2. Demand of service tax on commission paid to foreign agent for delivery of parcels. Analysis: Issue 1 - Liability to pay service tax as a co-loader: The appellant contested the demand of service tax as a co-loader for the period from May 2006 to August 2007 under Business Support Service (BSS). The appellant argued that Circular No. 138/96 dated 27.11.1996 clarified that no service tax is payable by co-loaders. However, the Department demanded service tax based on a subsequent Circular No. 96/7/2007, stating that even subcontractors are liable to pay service tax. The appellant emphasized that double taxation would occur if they were asked to pay service tax as the courier agent who booked the parcel had already paid the tax. The Tribunal referred to the Circulars and a previous case law to rule in favor of the appellant, stating that the demand on the co-loader cannot be sustained and must be set aside. Issue 2 - Demand of service tax on commission paid to foreign agent: Regarding the demand for service tax on the commission paid to a foreign agent for delivering parcels abroad, the appellant argued against the reverse charge mechanism under Business Auxiliary Services. The appellant contended that since they had already paid service tax when booking the courier parcel for delivery abroad, the subsequent payment to the foreign agent should not be taxed. Citing a previous case law, the Tribunal agreed with the appellant, stating that the services provided by the overseas entity did not fall under the Taxation of Service Rules as they were performed entirely outside India. The demand on this issue was deemed unsustainable and set aside. In conclusion, the Tribunal found in favor of the appellant on both issues and set aside the impugned order. The Department's Miscellaneous Application for a change in the cause title was allowed, and the appeal was allowed with consequential reliefs, if any.
|
