TMI Blog2018 (2) TMI 1184X X X X Extracts X X X X X X X X Extracts X X X X ..... y them for services rendered by them. In the case of First Securities Pvt. Ltd. [2007 (6) TMI 33 - CESTAT, BANGALORE] the Tribunal has held that handling charges collected from investors and the amounts collected towards transaction charges cannot be equated to brokerage or commission for purchase of securities. Appeal allowed - decided in favor of appellant. - ST/MISC/41607/2017 & ST/355/2010 - Final Order No. 40412/2018 - Dated:- 8-2-2018 - Ms. Sulekha Beevi, Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Ms. Radhika Chandrasekar, Advocate for the Appellant Shri R. Subramaniyam, AC (AR) for the Respondent ORDER Per Bench The facts of the case in brief are that the appellants are registe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service, as the case may be, includes, (a) the aggregate of commission or brokerage charged by a broker on the sale or purchase of securities including the commission or brokerage paid by the stock-broker to any sub-broker; Ld. Counsel submits that the transaction charges were not charged by them but were charged by the stock exchange and that they were only collecting the amount from their clients and paying it on their behalf to the stock exchange. She also submits that wherever they had collected the amounts more than the transaction charges, they had discharged service tax liability on such excess amounts, a fact which is not disputed by the department. She further submits that the matter is no longer res integra and has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied upon by the Ld. Counsel. 5.2 In the case of First Securities Pvt. Ltd. (supra) the Tribunal has held that handling charges collected from investors and the amounts collected towards transaction charges cannot be equated to brokerage or commission for purchase of securities. The relevant portion of the said decision is reproduced as under:- 6. In the impugned order, the Commissioner (Appeals) has held that the lower authority is right in including the handling charges and transactions charges as part of the taxable value as additional brokerage for Service Tax purpose. The learned Advocate who appeared for the appellants took us through the impugned order and stated that the Commissioner (Appeals) was not justified in statin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fixed, as in stock market transactions, by trade or government bodies, and may take any of various forms, such as a percentage or modification of selling price; a (finders) fee; an underwriting or other discount (4); a concession or other advantage (whether or not transaction -related). The handling charges are the expenses incurred for handling shares on delivery. The appellants have clarified that prior to 2001, there used to be physical delivery of scrips and certificates and the appellants were charging towards 'handling' of scrips and certificates. The 'handling charges' were collected from certain investors/clients. In respect of speculative transactions, no handling charges were collected from the investors/clie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the nature of commission or brokerage or had the characteristic of such nature that was failed to be discharged. The character of commission or brokerage is remuneration for the service of stock broking provided by a stock broker to investors. Therefore, aforesaid charges realized by appellants were not being of commission or brokerage are not taxable and shall not form part of gross value of taxable service. On merit, all the appellants succeed on the fundamental principles of taxation. Therefore, other contentions on merit made in respective appeals are not considered in this order. 5.3 In view of the discussions made herein above and in particular following the ratio laid down by the Tribunal in the cases referred supra, we hold in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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