Home Case Index All Cases Service Tax Service Tax + HC Service Tax - 2017 (10) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (10) TMI 514 - HC - Service TaxTaxability - outstanding dues - whether the amount shown as outstanding in the books of accounts of the Assessee as on 10th May 2008 would be amenable to service tax by virtue of the amendments? - amendment made in Explanation (c) to Section 67 of the FA 1994 - an explanation was added to sub-rule (1) under Rule 6 of the STR, 1994 by N/N. 19/2008/ST dated 10th May 2008 - The CESTAT has, in the impugned order, held that the amendment was made to Section 67 of the FA 1994 as well as Rule 6 of the ST Rules only with effect from 10th May 2008 and not retrospectively. It was noted that the explanation to Rule 6 being prejudicial to the interest of the AE would, therefore, not apply retrospectively. Held that: - As a consequence of the above amendments, service tax was required to be paid on taxable service provided to AEs even where the consideration of such tax and services had not actually been received but had been shown in books of accounts as “outstanding”. Although the intention behind the insertion of the above Explanation to Rule 6 of ST Rules corresponding to the amended Explanation (c) to Section 67 of the FA was to bring amounts receivable from the AEs of the Assessees to tax, the intention was not to make it retrospective, i.e. to tax the transactions that have taken place prior to 10th May 2008. Admittedly, the amount shown outstanding in the books of accounts of the Assessee pertained to the transactions that had taken place prior to 10th May 2008. As per Rule 6, it is the date when the amount is credited/debited that is relevant and not the fact that the amount remains in the books. Any contrary interpretation would result in the provision being made retrospective, which was not the intention. The Court is satisfied that no error has been committed by the CESTAT in answering the issue in favour of the Assessee, viz., that the aforementioned amendments to the FA 1994 as well as the ST Rules cannot be made retrospective - appeal dismissed - decided against Revenue.
|