The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) delivered 3 member’s opinions on the determination of service tax liability which lies on the service receiver who receives any kind of service and is obliged to make the payment.
Vodafone Idea Ltd. (formerly known as ‘M/s. Vodafone Cellular Ltd.’), the appellant assessee was engaged in the provision of Telecommunication Services, Business Auxiliary Services, Intellectual Property Services, etc. They are registered with the Service Tax Department and are filing Service Tax returns periodically in terms of Rule 7 of the Service Tax Rules, 1994.
The assessee appealed against the order passed by the adjudicating authority for confirming the demand of Service Tax imposed on International inbound roaming charges along with interest and imposed penalty.
During the hearing of the appeal, ShwethaVasudevan appeared as the counsel for the assessee and Sridevi Taritia appeared on behalf of the revenue department.
The CESTAT Bench delivered a difference of opinion in the determination of service tax liability and the majority of the bench quashed the demand raised as the demand for service tax.
Sulekha Beevi (Judicial) held that the demand raised by the department was not as per the law and was liable to be quashed.
Sanjiv Srivastava (Technical) observed that the Service tax was normally required to be paid by the provider of a service, except where he was located outside the taxable territory and the place of provision of service was in the taxable territory.
D.M. Misra (Judicial) observed that the person who was legally entitled to receive a service and, therefore, obliged to make payment, was the receiver of a service, whether or not he made the payment or someone else makes the payment on his behalf.
Also held that in the present appeal by examining the issue from all angles, it cannot be said that the Foreign Telecommunication Operator (FTO) was not the service receiver, but the visitors to India who use the service during their visit to India, are the service receiver.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
