9911796707
TMI BlogPERSON LIABLE TO PAY SERVICE TAXX X X X Extracts X X X X X X X X Extracts X X X X ..... PERSON LIABLE TO PAY SERVICE TAX - By: - Mr. M. GOVINDARAJAN - Service Tax - Dated:- 10-4-2009 - - Service tax levied is liable to be credited to the Central Government account. Sec. 68 of the Finance Act, 1994 ('Act' for short) provides that every person providing taxable service to any person shall pay service tax at the rate specified in Sec. 66 in such manner and within such period as may be prescribed. Thus the service provider is liable to pay service tax. Now there are 106 services under the service tax net. This Section further provides that in respect of any taxable service notified by the Central Government in the Official Gazette, the service tax thereon shall be paid by such person and in such manner as may be pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escribed at the rate specified in Section 66 and all the provisions of the service tax shall apply to such person as if he is the person liable for paying the service tax in relation to such service. Sec.66 of the Act provides that the service recipient is liable to pay service tax in certain cases with effect from 18.04.2006. It provides that where any taxable service is provided or to be provided by a person who has established a business or has a fixed establishment from which the service is provided or to be provided or has his permanent address or usual place of residence, in a country other than India and received by person (recipient) who has his place of business, fixed establishment, permanent address or usual place of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... residence in India, such service shall, for the purpose of this section, be taxable service, and such taxable service shall be treated as if the service recipient had himself provided the service in India. Rule 2(d) of Service Tax Rules, 1994 ('Rule' for short) defines the term 'person liable for paying service tax' as- (i) in relation to telecommunication service the Director General of Posts and Telegraphs referred to in Sec. 3(6) of the Indian Telegraph Act, 1885; or the Chairman-cum-Managing Director, Mahanagar Telephone Nigam Limited, Delhi, a company registered under the Companies Act, 1956; or any other person who has been granted a licence by the Central Government under the first proviso to Sec. 4(1) of the Indian Teleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raph Act, 1885; (ii) in relation to general insurance business, the insurer or re-insurer, as the case may be, providing such services; (iii) in relation to insurance auxiliary service by an insurance agent, any person carrying on the general insurance business or the life insurance business, as the case may be, in India; (iv) in relation to any taxable service provided or to be provided by any person from a country other than India and received by any person in India under Sec. 66A of the Act , the recipient of such service; (v) in relation to taxable service provided by a goods transport agency, where the consignor or the consignee of goods is- Any factory registered under or governed by the Factories Act, 1948; Any company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formed and registered under the Companies Act, 1956; Any corporation established by or under any law; Any society registered under the Societies Registration Act, 1860 or under any law corresponding to that Act in force in any part of time; Any co-operative society established by or under any law; Any dealer of excisable goods, who is registered under the Central Excise Act, 1944 or the rules made there under; or Any body corporate established, or a partnership firm registered by or under any law; Any person who pays or is liable to pay freight either himself or through his agent for the transportation of such goods by road in a goods carriage; (vi) in relation to business auxiliary service of distribution of mutual fund b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a mutual fund distributor or an agent, as the case may be, the mutual fund or asset management company, as the case may be, receiving such service; (vii) in relation to sponsorship service provided to any body corporate or firm located in India, the body corporate or, as the case may be the firm who receives such sponsorship service; The following are the case laws in respect of persons liable for paying service tax: 1. Kerala State Electricity Board V. Commissioner of Central Excise, Trivandrum - [2007 -TMI - 2362 - Supreme Court of India] Kerala State Electricity Board, recipient of consulting engineering service from a Canadian company was held to pay service tax on the basis of the agreement between the parties. 2. Hanil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lear (I) (P) Ltd., V. Commissioner of Service Tax, Chennai - [2009 -TMI - 32140 - CESTAT CHENNAI] The appellants received certain services from a few foreign companies under agreement executed between them that these services received during the period from February 1999 to 15.8.2002 that these services were designated as consulting engineers service by the department and that service tax was demanded by lower authorities. In the present appeal the appellants submitted that there was no authorization by the foreign companies to the appellants to pay service tax on their behalf in respect of the amounts received from the appellants as consideration for the services in question. The tribunal analyzed the provisions of the agreements. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The relevant provision says that service tax liability shall be borne by the recipient of service. That does not mean that the statutory liability to pay service tax is on the appellants. This only means, that where the foreign companies discharge their tax liability it would be passed on to the appellants. In view of this the tribunal found prima facie case for the appellants against the impugned demand and waived the pre deposit. 3. Invincible Security Service V. Commissioner of Central Excise, Noida - [2009 -TMI - 32156 - CESTAT NEW DELHI] The appellants had entered into an agreement with BSNL, Moradabad for providing security service. It is revealed from the agreement that the service tax would be paid by M/s BSNL. BSNL paid tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and filed return in respect of services provided by the appellants. Show cause notices were issued proposing demand of tax, penalty and interest for non payment of tax by the appellants. The Adjudicating Authority as well as the Commissioner (Appeals) confirmed the demand of tax. The Commissioner (Appeals) however reduced the penalty imposed by the Adjudicating Authority. The Department contended that the liability of payment of tax on the appellant cannot be discharged by BSNL. The tribunal agreed with the department in this regard but it found from the order of the Commissioner (Appeals) that BSNL is registered with Central Excise Department and filed the return and deposited the tax with the Commissionerate of Moradabad which has been a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepted by them. Therefore the contention of the department is not sustainable. Further the appellants paid the interest for delay in payment of BSNL. The tribunal therefore set aside the demand of tax and penalty. 4. Navayug Alloys Private Limited V. Commissioner of Central Excise Customs, Vadodara II - [2008 -TMI - 31916 - CESTAT AHEMDABAD] Service tax of Rs.51,385/- stands confirmed against the appellant who is availing the Goods Transport Services. It is on record that the service tax on the said services stands paid by the transporters. The Revenue's contention is that it was the liability of the appellant to pay the tax and service tax paid by the transporter providing services cannot be treated as valid payment. However the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue has not refunded the tax paid by the transporter to them. The tribunal held that once tax already paid on the services, it was not open to the department to confirm the same against the appellants in respect of the same services. 5. Brahmputra Valley Fertilizer Corporation Limited V. Commissioner of Central Excise, Dibrugargh - [2009 -TMI - 32626 - CESTAT, KOLKATA] The only dispute in this case relates to whether exemption under Notification No. 32/2004-ST , is available to a person made liable to pay service tax. The matter has been examined by the Central Board of Excise Customs in the meantime and a clarificatory circular No. 5/1/07-ST, dt. 12.03.2007 has been issued. With the consent of both the parties the impuged o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder is set aside and remanded to the original authority. 6. MSPL Limited V. Commissioner of Central Excise, Belgaum - [2009 -TMI - 32448 - CESTAT, BANGALORE] The appellants are the manufacturers of Oxygen and Nitrogen. They transport the cylinders to their buyers in their own vehicle and collect the transportation charges. Revenue proceeded against them on the ground that they are providing the services of Goods Transport Agency. The original authority confirmed the demand of tax, interest and imposed penalties. The Commissioner (Appeals) remanded the matter to the Adjudicating Authority. The appellants filed this appeal aggrieved against the order. The appellants contended that- Ø The appellants use their own vehicles and n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot the Goods transport agency; Ø The services provided by a goods transport agency to a consumer in relation to transportation of goods is taxable service; Ø There must be service provided to a customer by a Goods Transport Agency in relation to transportation of goods by road; Ø The appellants being manufacturer consignor of goods and owner of vehicles cannot provide to themselves as customer the service in relation to transportation of goods; Ø The appellants being the consignor of the goods is one of the seven persons prescribed under rule 2(1)(d)(v) of the Rules and therefore the liability to pay service tax is on the person paying the freight irrespective of whether the consignee/customer is one of the sev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en specified persons or not. The tribunal held that the buyer is the person who actually pays the freight. It is very clear in terms of Sec. 2(1)(d)(v) that the liability to pay service tax is cast on the person who pays the freight. In this case the person who pays the freight is the buyer. Therefore the appellant has no liability to pay service tax. - Reply By Chetan Mistry as = Sir, I am an insurance agent and i have recently registered my agency with one of Life insurance company. Now as per the rule of service tax in relation to insurance auxiliary service by an insurance agent, any person carrying on the general insurance business or the life insurance business, as the case may be, in India; the service tax has to be paid by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Life insurance company. But it is not clear whether the insurance company has to recover the service tax from its agent and pay or it has to pay it from its pocket. Please clarify. Thanking you chetan mistry Dated: 18-4-2009 Reply By Ankush Tare as = What is the law for tranporter for service tax Thanks Ankush Tare Dated: 2-6-2009 Reply By Sharad Aggarwal as = the insurance company is supposed to pay the service tax from itself Dated: 13-2-2010 - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
