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2014 (11) TMI 585 - AT - Service TaxBanking and other Financial Services - whether the sale of RBI Bonds on commission basis would be liable to service tax under “Banking and other Financial Services” for the period prior to 10/09/2004 or not - Held that:- Unlike other banks, RBI does not undertake borrowing or lending on its own. Whenever the RBI undertakes borrowing activities, it is on behalf of the Government of India to manage the Indian economy which its constitutional responsibility. Therefore, the lending or borrowing of money by the Government is a sovereign function and on such functions there cannot be any tax liability whether by way of direct tax or by way of indirect tax. This is the principle followed by this Tribunal in the case of HDFC Bank [2014 (1) TMI 1611 - CESTAT MUMBAI] and Canara Bank case (2012 (6) TMI 274 - CESTAT, AHMEDABAD). - Decided in favour of assessee.
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