{"id":253282,"date":"2021-08-27T11:00:56","date_gmt":"2021-08-27T05:30:56","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=253282"},"modified":"2021-09-10T11:42:44","modified_gmt":"2021-09-10T06:12:44","slug":"cestat-can-service-tax-be-charged-on-the-commission-which-is-the-difference-between-the-telephone-recharge-amount-received-from-customers-and-amount-out-of-the-same-paid-to-telecom-companies-tribun","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2021\/08\/27\/cestat-can-service-tax-be-charged-on-the-commission-which-is-the-difference-between-the-telephone-recharge-amount-received-from-customers-and-amount-out-of-the-same-paid-to-telecom-companies-tribun\/","title":{"rendered":"CESTAT | Can service tax be charged on the commission which is the difference between the telephone recharge amount received from customers and amount out of the same paid to telecom companies? Tribunal answers"},"content":{"rendered":"

Customs, Excise and Services Tax Appellate Tribunal (CESTAT):<\/strong> The Coram of Ramesh Nair (Judicial Member) and Raju (Technical Member) allowed an appeal which was filed against the impugned order which required demand of service tax involved is on three counts:<\/p>\n

    \n
  1. Demand of Rs. 31,51,929\/- for the period upto 01-12-2009, is demand on the sharing of Revenue received by the appellant under joint venture agreement with E.Mitra Societies, under Maintenance and Repair Services.<\/li>\n
  2. \u00a0Rs. 14,72,339\/- is demand where there is no joint venture agreement and the appellant were liable to pay service tax but the service tax was deducted by E.Mitra societies and the same was claimed to have been deposited by the Society.<\/li>\n
  3. \u00a0Demand of Rs. 47,43,442\/- corresponding to appellant\u2019s income relating to difference between the telephone recharge amount paid by the customers and appellant remitted the amount to BSNL, under Business Auxiliary Service.<\/li>\n<\/ol>\n

    The Tribunal as regard to the demand of 31,51,929\/- found that the overall reading of tripartite agreement, the appellant was the one of the party under joint venture. It was observed that Adjudicating Authority had selectively considered the few clauses of the agreement. Further, the appellant claimed that if overall agreement was read then it was clear that the appellant was partner in joint venture and overall activity was on sharing basis therefore, appellant was not liable to pay service tax. The Tribunal further held that the conclusion arrived by the Commissioner was not proper and legal.<\/p>\n

    As regards the demand of Rs. 14,72,339\/-, the appellant ad submitted that though the appellant was liable to pay service tax but there was no joint venture arrangement for the period 01-12-2009 to 31-03-2011. It was further submitted that the service tax was deducted by E.Mitra and the same was deposited by the society. The Tribunal observed that if it was so, after verification, if it was established that the payment was deducted from the amount paid to the appellant and the same was deposited in the Government exchequer, then prima facie service tax once again cannot be demanded from the appellant.<\/p>\n

    The appellant had also raised the issue of jurisdiction, he had submitted that since they have raised the bills from Rajasthan and provided service in Rajasthan only, therefore the jurisdiction in that State apply and not Ahmedabad jurisdiction. The Tribunal after perusing Rule-4 of Service Tax Rules, 1994 found that Adjudicating Authority had also not considered the entire provision and it was interpreted in piecemeal and came to the conclusion that appellant falls under Ahmedabad jurisdiction.<\/p>\n

    As regards the demand of Rs. 47,43,442\/- which represented service tax on difference between the telephone recharge amount received from customers and amount out of the same paid to telecom companies the Tribunal observed that difference amount was nothing but commission against sale of SIM Cards or recharge of SIM Cards relying on various judgments of the Tribunal in CCE, Meerut v. Moradabad Gas Service<\/em> , 2013 (31) STR 308 (Tri. Del.), GR Movers v. CCE, Lucknow <\/em>, 2013 (30) STR 634 (Tri. Del.), Daya Shankar Kailash Chand v. CCE Lucknow<\/em>, 2013 (30) STR 428 (Tri. Del.), Omar Agecies (Hutch) v. Commissioner of C. Ex., Allahabad,<\/em> 2015 (40) S.T.R. 1135 (Tri.- Del.) and Reliance Communication Infrastructure Ltd. v. C.S.T<\/em>., 2019 (22) G.S.T.L. 223 (Tri- Mumbai).<\/p>\n

    The Tribunal while allowing the appeal held that difference amount between the sale of SIM card \/ recharge of SIM card and the amount remitted to the telephone company was nothing but only commission on which suffered service tax in the hands of principal and thus the matter required reconsideration.[Virmati Software and Telecommunications v. CCE &ST, 2021 SCC OnLine CESTAT 2498<\/b><\/a>, decided on 19-08-2021]<\/p>\n

    \n

    Suchita Shukla, Editorial Assistant has reported this brief.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

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Mahar (Technical Member), allowed an appeal filed aggrieved by the penalties imposed on the service tax and disallowance of cenvat credit. The appellant had set up a Shopping Mall cum Entertainment World known\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/09\/CESTAT-Taxscan.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/09\/CESTAT-Taxscan.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/09\/CESTAT-Taxscan.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/09\/CESTAT-Taxscan.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/09\/CESTAT-Taxscan.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":236319,"url":"https:\/\/www.scconline.com\/blog\/post\/2020\/09\/26\/cestat-service-tax-penalty-of-rs10383141-set-aside-completely-tribunal-allowed-appeal\/","url_meta":{"origin":253282,"position":1},"title":"CESTAT | Service Tax Penalty of Rs 1,03,83,141 set aside completely; Tribunal allowed appeal","author":"Editor","date":"September 26, 2020","format":false,"excerpt":"Customs, Excise and Services Tax Appellate Tribunal (CESTAT): A Division Bench of Anil Choudhary (Judicial Member) and P. Venkata Subba Rao (Technical Member), allowed an appeal which was filed on being aggrieved by the dismissal of the appeal by the Commissioner (Appeals). The appellant is registered with the Service Tax\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/09\/CESTAT-Taxscan.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/09\/CESTAT-Taxscan.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/09\/CESTAT-Taxscan.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/09\/CESTAT-Taxscan.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/09\/CESTAT-Taxscan.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":261572,"url":"https:\/\/www.scconline.com\/blog\/post\/2022\/02\/11\/whether-the-services-provided-by-crs-companies-to-the-appellant-can-be-subjected-to-levy-of-service-tax-under-the-oidar-services-cestat-addresses\/","url_meta":{"origin":253282,"position":2},"title":"Whether the services provided by CRS companies to the appellant can be subjected to levy of service tax under the OIDAR services? CESTAT addresses","author":"Editor","date":"February 11, 2022","format":false,"excerpt":"Customs, Excise and Services Tax Appellate Tribunal (CESTAT): The Coram of Dilip Gupta (President) and P.V. Subba Rao (Technical Member) took up an appeal which was filed by Air India to assail that part of the order by which the demand of service tax of Rs. 37,58,23,581\/- has been confirmed\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Customs, Excise and Services Tax Appellate Tribunal","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/CESTATNew-Logo.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/CESTATNew-Logo.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/CESTATNew-Logo.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/CESTATNew-Logo.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/CESTATNew-Logo.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":253972,"url":"https:\/\/www.scconline.com\/blog\/post\/2021\/09\/10\/cestat-discounts-offered-by-car-manufacturers-to-their-dealers-for-onward-transmission-to-corporate-customers-taxable-tribunal-explains\/","url_meta":{"origin":253282,"position":3},"title":"CESTAT | Discounts offered by car manufacturers to their dealers for onward transmission to corporate customers taxable? Tribunal explains","author":"Editor","date":"September 10, 2021","format":false,"excerpt":"Customs, Excise and Services Tax Appellate Tribunal (CESTAT): The Coram of CJ Mathew (Technical Member) and Ajay Sharma (Judicial Member), allowed an appeal which was filed against the impugned order of the Commissioner of Central Excise & Service Tax (Appeals -IV) wherein he had upheld demand of Rs 29,57,199\/-, for\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/09\/CESTAT-Taxscan.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/09\/CESTAT-Taxscan.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/09\/CESTAT-Taxscan.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/09\/CESTAT-Taxscan.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/09\/CESTAT-Taxscan.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":276693,"url":"https:\/\/www.scconline.com\/blog\/post\/2022\/11\/04\/whether-section-73a-of-the-finance-act-1994-applicable-when-service-tax-has-been-collected-and-retained-by-the-assessee-cestat-answers\/","url_meta":{"origin":253282,"position":4},"title":"Whether Section 73A of the Finance Act, 1994 applicable when service tax has been collected and retained by the Assessee; CESTAT answers","author":"Editor","date":"November 4, 2022","format":false,"excerpt":"\u00a0 \u00a0 Customs, Excise and Service Tax Appellate Tribunal: The coram of Ramesh Nair (Judicial Member) and Raju (Technical Member) set aside the order of the Commissioner confirming imposition of service tax and interest thereon along with penalties for \u2018Broadcasting Services\u2019 on an \u2018Advertising Services\u2019 agency. The Tribunal has directed\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Customs, Excise and Services Tax Appellate Tribunal","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/CESTATNew-Logo.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/CESTATNew-Logo.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/CESTATNew-Logo.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/CESTATNew-Logo.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/CESTATNew-Logo.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":271192,"url":"https:\/\/www.scconline.com\/blog\/post\/2022\/08\/05\/cestat-sets-aside-penalty-on-umed-bhawan-palace-for-delay-in-service-tax-situation-found-revenue-neutral\/","url_meta":{"origin":253282,"position":5},"title":"CESTAT sets aside penalty on Umed Bhawan Palace for delay in service tax; Situation found revenue neutral","author":"Editor","date":"August 5, 2022","format":false,"excerpt":"Customs, Excise and Services Tax Appellate Tribunal (CESTAT): Anil Choudhary (Judicial Member) allowed an appeal which was filed involving the question of as to whether penalty under Section 78 of Finance Act, 1994 was rightly imposed. Appellant is rendering service of accommodation in hotel and restaurant service. Pursuant to audit,\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Customs, Excise and Services Tax Appellate Tribunal","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/CESTATNew-Logo.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/CESTATNew-Logo.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/CESTATNew-Logo.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/CESTATNew-Logo.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/CESTATNew-Logo.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/253282","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/67011"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=253282"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/253282\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media\/201689"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=253282"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=253282"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=253282"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}