Transaction of Purchase and Sale of Liquor by Rajasthan State Beverages Corporation not under BAS, not Taxable: CESTAT [Read Order]
![Transaction of Purchase and Sale of Liquor by Rajasthan State Beverages Corporation not under BAS, not Taxable: CESTAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2023/07/Transaction-of-Purchase-and-Sale-of-Liquor-by-Rajasthan-State-Beverages-Corporation-BAS-Taxable-CESTAT-TAXSCAN.jpg "Transaction of Purchase and Sale of Liquor by Rajasthan State Beverages Corporation not under BAS, not Taxable: CESTAT [Read Order]")
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the transaction of purchase and sale of liquor by Rajasthan State Beverages Corporation, the appellant not under Business Auxiliary Service (BAS) and hence is not taxable. The State Government of Rajasthan incorporated the Corporation to ensure quality of liquor and effective...
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the transaction of purchase and sale of liquor by Rajasthan State Beverages Corporation, the appellant not under Business Auxiliary Service (BAS) and hence is not taxable.
The State Government of Rajasthan incorporated the Corporation to ensure quality of liquor and effective controlled distribution. For this purpose, all the liquor manufacturers/ re-sellers have to sell their products only to the Corporation as per the excise laws of the State and all the retail licensees can purchase liquor only from Corporation. Thus receipt, storage and dispatches of liquor can only be done by Corporation.
Theshow cause notices allege that the Corporation had earned commission on sale of liquor and the balance sheet/ trial balance also showed income under the head other incomes, but the Corporation had not paid service tax which was required to be deposited by it under business auxiliary services prior to 01.07.2012 and, thereafter, as a taxable service not covered either in the negative list of services or exempted list of services.
The contention of the Corporation is that the amount collected by the Corporation for the reason that the conditions stipulated in the agreement had not been complied with by the liquor manufacturers are not consideration in view of any service and, therefore, cannot be held to be taxable under section 66E(e) of the Finance Act.
The Corporation also placed reliance upon the Circular 28.02.2023 issued by Central Board of Indirect Tax & Customs regarding leviability of service tax under section 66E(e) of the Finance Act.
A Two-Member Bench of the Tribunal comprising Justice Dilip Gupta, President and Hemambika R Priya, Technical Member observed that “transaction of purchase and sale of liquor by the Corporation will not fall within the ambit of BAS and would, therefore, not be taxable. The two appeals filed by the department, therefore, deserve to be dismissed.”
To Read the full text of the Order CLICK HERE
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