2018 (1) TMI 648 - AT - Service Tax

Business Auxiliary Service - whether the amounts received by the appellant as consideration for hiring out the buses to APSRTC during the period 2005-06, 2006-07 (prior to 01.06.2007) would amount to taxable services under business auxiliary services or otherwise? - Held that - Board vide circular No 137/155/2007 CX.4 dated 02.08.2007 has categorically clarified that mere renting of buses prior to 1.6.2007 will not be taxable under business auxiliary services or any other services. If this is the clarification given by the Board, both the lower authorities have erred in holding that amounts received by the appellants are taxable under business auxiliary services - appeal allowed.

Summary

Issues:
Whether amounts received for hiring out buses to APSRTC during a specific period would amount to taxable services under business auxiliary services or not.

Analysis:
The appellate tribunal considered the issue of whether the amounts received by the appellant for hiring out buses to APSRTC during a specific period would be taxable under business auxiliary services. The tribunal noted a clarificatory circular issued by the Central Board of Excise and Customs, stating that prior to 1.6.2007, mere renting of buses was not taxable under business auxiliary services or any other taxable services. The tribunal found that both lower authorities had erred in holding the amounts received by the appellants as taxable under business auxiliary services. Therefore, the tribunal set aside the impugned order and allowed the appeal.

This judgment highlights the importance of clarificatory circulars issued by relevant authorities in interpreting tax liability for specific services. It emphasizes the need for adherence to such clarifications to ensure correct application of tax laws. The tribunal's decision to overturn the lower authorities' ruling underscores the significance of clear guidance from regulatory bodies in determining tax obligations for businesses providing services like renting of buses.