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2016 (11) TMI 22 - AT - Service TaxLevy of tax - activities of cash management - Business Auxiliary Service - Section 65(19) of the Finance Act, 1994 - demand of interest u/s 75 and imposition of penalties - The Banking and Other Financial Services (BOFS) was included in the statute w.e.f 16.7.2001 under Section 65(12), however, the definition as it was initially introduced specifically excluded cash management services. The definition of scope of BOFS was further amended w.e.f 1.6.2007 when cash management service was specifically included under Clause (v). It is also on record that from 1.6.2007, the appellant has been discharging service tax liabilities under BOFS. Revenue authorities have taken a view that for the period prior to 1.6.2007 such services would be covered by BAS - whether the Revenue's view justified? Held that: - The deletion of the exclusion of cash management services is w.e.f 1.6.2007. The issue whether for the period prior to this date, such services can be charged to service tax under BAS stands decided by the Hon’ble Apex Court in the case of CST vs. M/s. Federal Bank Limited [2016 (3) TMI 354 - SUPREME COURT] where it was held that Clause (12) of Section 65 covers all charging services rendered by the Banks. - when cash management services stood excluded from the purview of service tax at the hands of the Bank until 31.05.2007, the authorities cannot levy service tax on an activity which is essentially cash management service, by taking aid of other general charging heads, such as business auxiliary service. Service tax not levied - appeal allowed - decided in favor of appellant.
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