2019 (8) TMI 1300 - AT - Service Tax

Valuation - stock broker services - NSE/BSE charges and SEBI turnover fees collected being a stock broker from their clients which is reimbursement of their payment made to NSE/BSE - inclusion in assessable value or not - HELD THAT - The issue that whether the BSE/NSE charges and SEBI turnover fees needs to be included in the assessable value of services of stock broker has been settled by various judgments including the judgment of this bench in the case of INDSES SECURITIES AND FINANCE LTD, SPAN CAPLEASE PVT LTD AND OTHERS VERSUS C.S.T. -SERVICE TAX - AHMEDABAD 2018 (2) TMI 569 - CESTAT AHMEDABAD according to which the statutory payment made by the stock broker and taking reimbursement from their client is not subject to levy of Service Tax. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Whether charges collected by a stock broker from clients, which are reimbursement of payments made to NSE/BSE, should be included in the value of stock broker services.

Analysis:
The judgment by the Appellate Tribunal CESTAT Ahmedabad dealt with the issue of whether charges collected by a stock broker from clients, which represent reimbursement of payments made to NSE/BSE, should be considered in the value of stock broker services. The appellant's counsel referred to a previous decision in the case of Span Caplease Pvt. Ltd. vs C.S.T Ahmedabad, where it was established that such charges are not subject to Service Tax. The tribunal, in line with previous judgments, including its own in the mentioned case, concluded that statutory payments made by stock brokers and subsequently reimbursed by clients are not liable for Service Tax. Therefore, the impugned order was set aside, and the appeal was allowed.

This judgment clarifies the treatment of charges collected by stock brokers from clients, which are essentially reimbursement of payments made to NSE/BSE. The tribunal relied on established legal principles and previous decisions to determine that such charges should not be included in the assessable value of stock broker services for the purpose of Service Tax. The decision provides clarity on the tax treatment of these charges and ensures consistency in the application of tax laws in similar cases.

The arguments presented by both sides were considered, with the appellant's counsel highlighting the settled nature of the issue based on previous judgments. The tribunal's decision was based on the principle that statutory payments made by stock brokers and subsequently recovered from clients as reimbursement should not attract Service Tax. By setting aside the impugned order and allowing the appeal, the tribunal reaffirmed the position that such charges are not to be included in the assessable value of stock broker services for taxation purposes. The judgment serves as a precedent for future cases involving similar issues and provides clarity on the tax treatment of reimbursement charges in the stock broking industry.