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RECENT CASE LAWS ON REVERSE CHARGE MECHANISM

Service Tax - By: - Mr. M. GOVINDARAJAN - Dated:- 7-4-2016 - Some interested recent case laws relating to reverse charge mechanism are discussed as below: Whether service recipient? The service tax recipient is liable to pay the service tax. Other persons are not liable to pay service tax. The onus is on the part of the department to prove that the person alleged for nonpayment of service tax under reverse charge mechanism is the actual service recipient. In Greenply Industries Limited V. Commis .....

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indicates that it is the ING VYSYA Bank paid the charges to the foreign bank. The appellant cannot be treated as service recipient and no service tax can be charged from them under Section 66A. Liability of service tax In P.C. Joshi V. Union of India - 2014 (12) TMI 595 - BOMBAY HIGH COURT the High Court held that Notification No.30/2012, dated 20.06.2012 proceeds to notify that the taxable service and the extent of service tax payable thereon by the person liable to pay service tax for the purp .....

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rabad - 2009 (5) TMI 372 - CESTAT, BANGALORE the appellants utilized the services of various overseas commission agents. They procured orders for the appellants and when the orders materialized into exports, the agents are paid commission based on the value of the orders generated. The Revenue proceeded against the appellant on the ground that the appellants are liable to service tax on the amount paid by them to the service provider. The Tribunal held that Reverse charge mechanism came into eff .....

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n these facts are clear, the Tribunal held that the service receiver is BNP Paribas and the service provider is COFACE, France. The appellant is only the beneficiary of the transactions held between BNP Paribas and COFACE, France. As the appellant is neither service provider nor service recipient, the appellant is not liable to pay service tax under reverse charge mechanism. CENVAT credit The service tax paid by the service recipient may take credit on the service tax paid on RCM if such service .....

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products abroad; Sales promotion, advertisements, promotional activities which are outsourced abroad. The Adjudicating Authority denied the credit in respect of banking and financial services and the business auxiliary services on the ground that the same are not in relation to manufacture of goods. The Tribunal held that the appellant paid the service tax as recipient of service under reverse charge mechanism in respect of banking and financial services and business auxiliary services. There is .....

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sing at buyer s premises. The assessee paid service tax as recipient of service. The Revenue contended that the services rendered by overseas agent are not covered under the definition of input service . The Tribunal held that the department interpreted categories of definition by dividing into four relating to manufacture of goods and activities relating to clearance of goods etc., The assessee engaged overseas service provider to carry out activities such as removing rust developed during tran .....

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ile exporting they are availing the services of certain commission agents located abroad. Certain amounts are paid to such commission agents and they are paying service tax on RMC. They had been availing CENVAT credit of such tax paid. Their unit was audited and the audit officers suggested that they should reverse the CENVAT credit and avail the exemption under Notification No. 18/2009-ST, dated 07.07.2009. The appellants reversed the credit and filed the refund claim. In the refund claim the a .....

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