9911796707
TMI Blog2010 (12) TMI 1269X X X X Extracts X X X X X X X X Extracts X X X X ..... in the city of Mumbai. The services provided by the respondents are governed by the provisions of the Indian Telegraphs Act, 1885 and Rules framed thereunder i.e. the Indian Telegraph Rules, 1951. The petitioner by this petition challenge the charging of service tax on bi-monthly rental bills. The petitioner is a subscriber under Own Your Telephone scheme. According to the petitioner, the present bi-monthly rentals for the said telephone is ₹ 340/-. As per the Finance Act, 1994 service tax at the rate of 5 per cent of the value of the taxable service is chargeable. The case of the petitioner is that the petitioner is liable to pay service tax on the amount of bi-monthly rental i.e. ₹ 340/- whereas the respondents are charging s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cession of ₹ 40/- in payment of bi-monthly rental, the respondents are entitled to claim service tax on the amount of ₹ 380/- which is the amount of bi-monthly rental. 3. It is an admitted position that the telephone facility which is installed at petitioner's residence is Own Your Telephone [Scheme]. The Circular issued by the Telegraph Department defines Own Your Telephone scheme which reads as under : 1.4 OYT (Own Your Telephones) Scheme. - This is a Scheme under which an applicant makes an advance lump sum payment in the form of advance payment of part of the rent for certain number of years. The subscriber gets a rebate and is liable to pay less rent than normal rent fixed by the Department. Indian Telegraph Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ually ₹ 384 ₹ 288 ₹ 240 (ii) On rentals paid bi-monthly ₹ 64 ₹ 48 ₹ 40 (iii) On rental paid monthly ... .. ₹ 20 5. A perusal of the above quoted portion makes it clear that a subscriber to whom a telephone connection is provided under the Own Your Telephone scheme is required to make initial payment of a specified lump sum amount and in consideration of he having paid the same, he gets reduction in the rentals for a fixed period. The period is 20 years and in case payment is ₹ 5000/- the amount of reduction is ₹ 40/-. It is thus, clear that the nature of initial payment is that it is lump sum payment towards rental and because the subscriber has made the lump sum payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t valuation of taxable service in relation to telephone connection is the gross total amount received by the telegraph authority from the subscribers. In the case of the petitioner, it will be the total amount of rental paid by the petitioner bi-monthly. A perusal of the bracketed portion of Section 67(b) shows that that portion comes into play where the amount is taken as a deposit by the telegraph authority and then that deposit is adjusted. Therefore, the whole debate is whether the amount of ₹ 5,000/- which is paid by the petitioner at the time of taking connection is deposit or payment. If it is to be treated as a deposit, then the bracketed portion in Section 67(b) would be applicable and ₹ 40/- which is reduction in the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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