Service Tax can’t be levied on Services rendered in Jammu & Kashmir: CESTAT [Read Order]

Service Tax - GST - CESTAT - Taxscan

The CESTAT, Allahabad bench, recently ruled that service tax cannot be levied on services rendered in the State of Jammu and Kashmir as the Finance Act, 1994 is not applicable to the State.

The Assessee-Company is engaged in the supply of petroleum products. While filing their service tax returns, the assessee did not disclose the details of services given by a goods transport agency in J&K between April 2011 and September 2014 by presuming that the same is not subject to tax. The department took a view that tax should have been deducted by the company on the reverse charge mechanism. Accordingly, the department levied an amount of 20 million and penalty on the assessee.

The assessee failed to secure relief from the first appellate authority.

When the matter was brought before the Tribunal, Advocate Abhishek Rastogi, also the partner at Khaitan & Co, appeared for the assessee contended that no service tax is leviable since the appellants’ J&K unit was the recipient of GTA service and services were also provided within the State.

While granting relief to the assessee, the division bench held that the provisions of service within the State of Jammu and Kashmir are beyond the scope of Chapter V of the Finance Act. This levy does not apply there even through the reverse charge.

“No provision related to service tax is presently applicable to Service Tax Law is presently applicable to services rendered in the State of Jammu & Kashmir,” the bench said.

 

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