Meal Passes and Group Insurance Services are Admissible Input Services: CESTAT Allows Credit [Read Order]

The Chennai Bench of Customs and Excise and Service Tax Tribunal (CESTAT) has allowed the credit holding that the meal passes and group insurance were admissible input services.

The appellant, Dassault Systemes Simulia Private Ltd was a dealer of imported software for their parent company namely, Dassault Systemes Simulia Corp., United State of America. The appellant was engaged in the supply of software in India and also provided maintenance, enhancement and support service to their clients in India.

During the scrutiny of balance sheet for the year 2008-09 as well as the invoices raised by the appellant for the period 2008-09 and 2009-10, it was noticed that though the appellant had incurred expenditure towards import of software from their parent company during the period from May 2008 and March 2009, they had remitted service tax only for few months.

There was a short payment of service tax for the above months and also had not paid service tax for the period of May 2008 to November 2009.

The appeal had been filed with regard to demand of the amount by which cenvat credit availed on meal passes and group insurance services which had been disallowed. Shrayashree T on behalf of the assessee submitted that the said services were availed for the benefit of the employees.

Needless to say, that during the relevant period (prior to 01.04.2011) the definition of "input services" had a wide ambit as it included the phrase "activities relating to business". Thus, almost all the services were covered within the definition of "input services" if used for providing the output services. There was nothing to show that the said services were not used for the employees of the appellant-company.

The Two-member Bench of Sulekha Beevi, (Member Judicial) M. Ajit Kumar, (Member Technical), referring to the decision of in the case of Ford, the appellant was eligible for the credit and set aside the impugned order.

To Read the full text of the Order CLICK HERE

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