Skip to main content

Service tax can't be imposed in J&K, says tribunal of pre-GST levy

By
Service tax can't be imposed in J&K, says tribunal of pre-GST levy
The case was from the earlier service tax regime, prior to rollout of the current goods and services tax
A tribunal has rejected indirect tax authorities’ demand to levy service tax for goods transported to Jammu and Kashmir on the reverse charge mechanism.
The case was from the earlier service tax regime, prior to rollout of the current goods and services tax (GST). Experts say such a dispute would not arise in the GST regime.A company supplying petroleum products had got a notice for services given by a goods transport agency in J&K between April 2011 and September 2014. The company contended that service tax, imposed since 1994, excluded the state of J&K; hence, no such levy was possible.
To which, the authorities said the tax should have been deducted by the company on the reverse charge mechanism.Generally, the seller of a service was liable to pay tax after deducting it from the service recipient. Under reverse charge, the buyer was to deduct the service tax before paying the service provider and to send on the tax amount to the government.The matter was settled in favour of the authorities by an order of the commissioner of service tax, Noida.
The company was told to pay service tax of Rs 20 million and alike penalty. It then petitioned the Customs, Excise and Service Tax Appellate Tribunal at Allahabad.The tribunal has ruled that service tax could not be imposed on services rendered in J&K. This levy does not apply there even through the reverse charge. Its counsel, Abhishek Rastogi, also partner at Khaitan & Co, said such a dispute could still arise for any period up to June 30, 2017, the eve of GST implementation.
However, not under the GST, even though the GST law used the same language to say it does not apply to J&K. That was got over with the ordinances of 2017 which extended the Central GST and Integrated GST to J&K, he explained.
The Business Standard, New Delhi, 26th March 2018

Comments

Post a Comment

Popular posts from this blog

Govt’s gamble on GST cuts: What do the bond and currency markets signal?

By
  It’s not just humans who suffer from cognitive biases; markets do too. Interestingly, different financial markets exhibit distinct biases, each interpreting events through its own prism of prejudice. Take the recent announcements on GST reforms: equity markets have chosen to view them through the lens of growth, while bond and currency markets are focusing on potential macroeconomic risks—fiscal pressures and current account challenges. So, which lens captures the true pulse?Equity markets may be right in expecting GST reforms to revive consumption, which has remained lacklustre for a while. But the key question remains—will this revival come at the cost of broader macro stability?It is well known that consumption stocks have rallied since the GST rationalisation announcement. But what about bond markets? What signals are they sending since this rejig was announced from the ramparts of the Red Fort?The signs aren't encouraging. Bond prices have slumped and yields have surged sinc...
Post a Comment
Read more

Luxury carmakers urge clarity on GST rates to boost festive season sales

By
  A clear picture regarding new GST rates at the earliest will help the overall auto industry, including the luxury car segment, to regain momentum in the ongoing quarter, which generally sees enhanced sales on account of the festive season.The high-powered GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on September 3-4 to discuss moving to a two-slab taxation.In an interaction with PTI, BMW Group India President and CEO Hardeep Singh Brar said the recent speculation about the change in GST rates has caused uncertainty in the minds of consumers.Consumer interest and demand is strong, but they (prospective buyers) have adopted a wait-and-watch approach, and this delayed decision-making is impacting new vehicle sales at a certain level, he noted."Expediting clarity on GST rates is essential to get back to speed and ensure the auto sector's contribution to economic growth during this quarter is robust," Brar stated.He also hoped that the sustainable p...
Post a Comment
Read more

Sebi proposes tighter norms for green bond third-party reviewers

By
  Sebi on Friday said it has proposed to tighten the norms to appoint independent third-party reviewers or certifiers for green debt securities to align them with requirements for other ESG-linked bonds.In a draft circular, Sebi said that the current norms for green bonds, introduced in February 2023, lack detailed requirements around reviewer independence, conflict of interest mitigation, and disclosure standards that are now in place for other ESG-linked securities under a June 2025 circular.The regulator's latest proposal seeks public comments on a revised framework that would bring parity by incorporating comprehensive criteria for third-party certifiers of green bonds on non-convertible securities.Under the proposed norms, issuers of green debt securities will need to appoint reviewers who are independent of their management, directors, and key managerial personnel. These reviewers will be remunerated in a way that prevents any conflicts of interest and possess relevant expert...
Post a Comment
Read more