The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the subsidy received from sale of mobile handsets purchased from independent vendors is business auxiliary services (BAS), chargeable to service tax.
The present appeal relates to the period from April 2010 to March 2011. It has been pointed out by Shohini, counsel for the appellant that for the earlier period from April 2006 to March 2010, a Division Bench of this Tribunal in Service Tax Appeal No. 51743 of 2018 decided on 03.08.2023 (M/s Balaji Trading Company versus Commissioner of Central Excise Commissionerate, Jaipur) had set aside this order and allowed the appeal and therefore, submitted that this appeal should also be allowed.
The Authorized Representative who appeared for the department submitted that the impugned order does not call for any interference.
In Balaji Enterprises versus Commissioner of Central Excise and Service Tax, Jaipur, the Tribunal observed that “subsidy received by the appellant from Tata Tele Services on the sale of mobile handsets purchased by the appellant from independent vendors can be said to be an amount received for providing “business auxiliary services” to Tata Tele Services and, therefore, chargeable to service tax.”
A Two-Member Bench comprising Justice Dilip Gupta, President and PV Subba Rao, Technical Member observed that “For the reasons stated by the Division Bench in Balaji Enterprises, we set aside the order dated 18.01.2018 passed by the Commissioner (Appeals) except to the extent it set aside. The appeal is allowed to the extent indicated above.”
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