Service Tax - Banking and Other Financial Services - Non-payment of Service Tax on Agency Commission received by M/s. State Bank of Mysore (Treasury Branch) - Reg. - Service Tax - F.No. V/DGST/21(11)M.O./2008

No. 01/2008, Dated : March 14, 2008 Subject : Service Tax - Banking and Other Financial Services - Non-payment of Service Tax on Agency Commission received by M/s. State Bank of Mysore (Treasury Branch) - Reg. During the course of audit at the State Bank of Mysore (Treasury Branch), Mysore, conducted by Central Excise Commissionerate, Mysore, a case was detected where 'commission' received on Government transactions and deducted by 'SBM G-SEVA Branch' Bangalore (which functions at 'Nodal Bank') is not being taken into consideration while discharging service tax liability by 'currency chest branches' of State Bank of Mysore and service tax is paid only on net amount of commission received. This case was reported to the Board by the Commissioner of Central Excise, Mysore. The copy of the Board's letter F.No. 137/310/2007-CX.4 dated 7.12.2007 and also the copy of the letter C.No. IV/1/364/2007 Hqrs (Audit) dated 27.11.2007 of the Commissioner, Central Excise, Mysore, are enclosed for ready reference. 2. It is possible that similar practice is being followed by other banks, in as much as their nodal banks may not have been registered with the department and also may not be paying service tax on the commission netted by such nodal banks. 3. This modus operandi may please be brought to the notice of all filed formations under your jurisdiction for appropriate action and the result thereof may be communicated to this Directorate at the earliest. F.No. V/DGST/21(11)M.O./2008 P.K. Sinha Additional Director