Service Tax - Reverse Charge liability paid by Service Provider, should not be demanded again from Service Recipient
We are sharing with you an important judgement of the Hon’ble Mumbai CESTAT, in the case of Umasons Auto Compo Pvt. Ltd. Vs. Commissioner of Central Excise & Customs, Aurangabad [2014 - TIOL – 126 – CESTAT - MUM] on following issue:
Whether Service Tax can be demanded again from the Service Recipient under reverse charge, where the same has been paid by the Service Provider and accepted by the Department?
Facts & Background:
M/s Umasons Auto Compo Pvt. Ltd. (“the Appellant” or “the assessee”) was receiving Goods Transport Agency (“GTA”) service from GTA service provider for which they were paying Service Tax to the provider of GTA service. The provider of GTA service deposited the amount of Service Tax to the Department, which was duly accepted by them. Subsequently, the Appellant has availed Cenvat credit of the amount of Service Tax so paid to the provider of GTA service.
The Assessing Officer raised demand for Service Tax on GTA services availed by the Appellant on the ground that in respect of GTA services, service recipient (i.e. the Appellant) is liable to pay Service Tax in terms of Section 68(2) of the Finance Act, 1994 (“the Finance Act”), and if the same has been paid by the service provider, recipient can seek refund of the same. The assessee preferred an appeal before the Commissioner of Customs & Central Excise (Appeals), Aurangabad who has upheld the Adjudication order and confirmed the demand. Hence the Appellant preferred an appeal before the Hon’ble Mumbai CESTAT.
It is held by the Hon’ble CESTAT that once the amount of Service Tax is accepted by the Revenue from the provider of GTA service, it cannot be demanded again from the recipient of the GTA service.
Therefore, the Hon’ble CESTAT rejected the contention of the Department and decided the case in favour of the Appellant