Motor Vehicle Registration by Dealer not ‘Business Auxiliary Service’: CESTAT revokes Service Tax Levy [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Bangalore, while hearing a Service Tax Appeal held that motor vehicle registration conducted by the automobile dealer is not a ‘Business Auxiliary Service’, vitiating any service tax levy on the same.

A Service Tax Appeal was filed by AVG Motors, an authorized dealer of Maruti Suzuki India Ltd (MSIL) for their passenger cars and is registered with the Central Excise Department as service provider under the category of 'Authorized Service Station' and 'Business Auxiliary Service'.

The Appellant facilitates temporary and permanent registration of the vehicle with the concerned Regional Transport Office (RTO) during the course of selling new vehicles from their showroom.

The Revenue contended such provision of temporary or permanent registration to be a taxable service, leading to demand proceedings and subsequent penalty and interests for the period from 01.10.2009 up to 30.06.2012 under Section 65(105)(zo) of the Finance Act, 1994 and under Section 65B (51) for the period from 01.07.2012 to 31.03.2014.

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P. Raghunathan,appearing for the Appellant referred to the decisions by the Tribunal in M/s Shakumbari Automobiles Pvt. Ltd. Vs. Commissioner, CGST, Dehradun (2023) and M/s Shantesh Motors Pvt Ltd Vs. Commissioner of Central Excise (2023) to contend that the activity of facilitating registration is not covered under 'Business Auxiliary Service' and it is not covered under any of the taxable services defined under Section 66 of the Act.

The two-member Bench of CESTAT, Bangalore composed of Judicial Member P.A. Augustian, and Technical Member Pullela Nageswara Rao, considered the submissions raised by either side and held that the issue regarding service tax on the registration has already been extensively settled by the Tribunal in numerous preceding decisions.

In light of such observations, the Customs, Excise & Service Tax Appellate Tribunal, Bangalore proceeded to allow the prayer in the present two-fold Appeal, holding that no service tax is payable for registration of the vehicle as held by the previous Adjudicating Authority.

To Read the full text of the Order CLICK HERE

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