9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (4) TMI 1266 - AT - Service TaxReverse Charge Mechanism - various Services from persons located outside India and made payment to them in foreign currencies - period from October, 2001 to November, 2006 - HELD THAT - Section 66A ibid has been inserted in the Statute w.e.f. 18.04.2006, providing for levy of service tax on reverse charge basis on the services procured from abroad. In the terms of the settled law on the subject, no service tax can be demanded for the period upto 17.04.2006 - the demand for service tax for services procured up to 17.04.2006 is set aside. Demand for service tax for the period 18.04.2006 to November, 2006 - HELD THAT - The appellant has admitted the liability for service tax to the extent of Rs,2,19,13,007/-, which has already been paid along with applicable interest before issue of SCN - demand of service tax with interest upheld - penalty set aside. Services in relation to ADB Projects - HELD THAT - In respect of services provided to International Organization including ADB, the appellant will be eligible for the benefit of exemption granted by the Notification No.16/2002-ST dated 02.08.2002. In the Certificate dated 23.02.2009 issued by the Chartered Accountant, it has been certified that an amount of ₹ 1,03,610/- has been paid towards professional fees for ADB projects in China - demand set aside. Demand for service tax i.e. 4,61,663/- is relating to subscription cost of publications - HELD THAT - The Chartered Accountant has certified that the total remittance of ₹ 16,56,652/- has been made on 25th May, 2006 and ₹ 21,15,180/- has been made on 31st August, 2006 towards subscription cost of foreign publication. In the absence of any service procurement, no service tax can be levied on the said amount. Appeal allowed in part.
Issues:
1. Liability for service tax on reverse charge basis for services procured from abroad. 2. Applicability of service tax for the period before and after the introduction of Section 66A of the Finance Act, 1994. 3. Exemption from service tax for services provided to International Organizations. 4. Service tax liability on subscription cost of publications. Analysis: 1. The appellant, engaged in Management Consultancy Services, received services from abroad and made payments in foreign currencies. The Department issued a show-cause notice for service tax demand based on Rule 2(1)(d)(iv) of the Service Tax Rules, 1994. The impugned order confirmed a service tax demand of &8377; 4,96,55,211/-, with penalties under Section 77 and 78 of the Finance Act, 1994. The appellant challenged this order. 2. The appellant argued that the liability for service tax on reverse charge basis for services procured from abroad was settled by the Supreme Court in a specific case. It was contended that no service tax could be demanded for the period before the introduction of Section 66A of the Finance Act, 1994. The Tribunal set aside the demand for service tax up to 17.04.2006. For the period after the introduction of Section 66A, the Tribunal upheld the payment of service tax and interest but set aside the penalty. 3. Regarding the remaining service tax demand, an amount related to services in relation to Asian Development Bank (ADB) projects. The Tribunal noted that the appellant would be eligible for exemption under Notification No.16/2002-ST for services provided to International Organizations like ADB. The demand for service tax related to ADB projects was set aside based on the certification provided by the Chartered Accountant. 4. The rest of the demand was related to the subscription cost of publications. The Tribunal observed that no service procurement was involved in this payment. The Chartered Accountant certified the remittances made towards the subscription cost of foreign publications. Consequently, the Tribunal concluded that no service tax could be levied on this amount. In conclusion, the Tribunal partly allowed the appeal, confirming a specific amount of service tax liability while setting aside the rest. Penalties were also set aside, and the appellant was entitled to consequential relief.
|
