The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Bench rejects tax claim of 5 Crores ordered as ‘deemed provider’ of ‘online information data base access or retrieval service’ thereby granting relief to Singapore Airlines.
The appeal of M/s Singapore Airlines lies against order of the Commissioner of Service Tax in which tax liability of Rs 5,78,00,015 has been ordered for recovery from them as ‘deemed provider’ of ‘online information data base access or retrieval service’ taxable under section 65(105) (zh) of Finance Act, 1994.
The allegation against the appellant is that they availed the services of ‘computer reservation system’ provider based outside India for their passenger handling and operational requirements for consideration on which tax liability has not been discharged by them as required under section 66A of Finance, Act, 1994.
The Counsel for the appellant,UdayanChokki relied on many decisions likeBritish Airways v. Commissioner of Central Excise (Adjn), Delhi;Qatar Airways v. Commissioner of Service Tax, Mumbai etc to substantiate the question of law in the appellant’s favour.The Authorised Representative for the Revenue,Nitin M Tagade, submitted that the adjudication order has rightly made out a case for recovery of the tax liability from the appellant
The Bench consisting of C J Mathew (Technical Member) and Ajay Sharma (Judicial Member), relied on the judgment in re Korean Air and observed that “Considering the several decisions in which the Tribunal has consistently taken the stand that the provisions of such service to the overseas entity by an entity situated abroad does not merit liability under section 66A of Finance Act, 1994.”
“The impugned order not identified the local office of the airline operator as the recipient of the service. Respectfully following the decision, we set aside the impugned order and allow the appeal” the Tribunal added.
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