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Service tax liability on liquor license fee

Service Tax - By: - CA Venkata prasad Pasupuleti - Dated:- 25-1-2017 - paid to state governments One of the recent trends has been enquiries and letters by the service tax department to all restaurants/bars/wine shops demanding payment of service tax on the liquor license fee paid to the state government. Department is also backing this vide circular 192/02/2016-Service Tax dated 13.04.2016 (Sl. No. 5) clarifying that service tax is leviable on the license/permit fees paid. In this background, a .....

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e/purchase of liquor, issuance of licenses/permits and payment of license fee etc., For instance, A.P Excise Act, 1968 inter alia provides that Sale or buying of liquor without license is prohibited (Section 15); License/permit shall be granted on payment of license fee (Sec. 28); License/permit can be cancelled/suspended in case license fee is not duly paid (Sec. 31); Further license is specific to each locality and specified area and sale of liquor shall be made from the premises for which lic .....

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vices provided by Government are kept out of service tax levy (by placing in Negative list qua Section 66D of Finance Act, 1994). The support services are one among the selected services that are being taxed under reverse charge in the hands of business entities. However w.e.f 01.04.2016, instead of taxing selected Government services (support services), law was amended to tax all the services of Government with few exemptions. Further service tax was required to be paid by the recipient of the .....

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t is clear that exemption is available to all types of registration once the same is required under any law. What constitutes the word registration is not defined in which case, the Natural and ordinary meaning (known as common parlance theory) shall be adopted to construe the ambit of exemption. The natural meaning of registration is that act of enrolling or specifically recognized etc., Conclusion on applicability of service tax on liquor license fee: Form the said exemption entry in the view .....

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