Recent caselaws in Service Tax

Latest Case Laws:
 Adopt same yardstick for establishing nexus between input and output service for deciding availability of cenvat credit or refund of credit. Pipavav Shipyard Ltd v/s Commissioner of Central Excise, Bhavnagar 2016 (41) STR 151 (Tri-Ahmedabad).
 No service tax to be levied where an activity has been undertaken in India but the ultimate purpose is for rendering service outside India. International Overseas Services v/s Commissioner of Service Tax, Mumbai 2016(41) STR 230 (Tri- Mumbai).
 No Input Tax Credit available where nexus between input and output is not proved, even if the input services is received by the service provider himself. Kilburn Chemicals Ltd. v/s Commissioner of Central Excise, Tirunelveli 2016 (41) STR 131 (Tri- Chennai)
 Even if input service is received at premises other than from where output service is executed, taxpayer can claim refund of the same. Exfo Electro-Optical Engineering (P) Ltd v/s Comissioner of Central Excise, Pune 2016 (41) STR 65

Service tax on Data Storage Services Provided in India and abroad by the companies registered in India

In a regime where cloud computing is gaining popularity and the servers providing the facility of data storage at remote location, it becomes pertinent to assess whether such activity constitute “service” or “Goods” for taxation purpose. Although service tax law has gone through drastic change by introduction of negative list concept w.e.f. 01/07/2012, litigation still continues on old system of service tax law. It becomes necessary to discuss taxability in different scenarios in order to bring out the clear picture: Service Tax prior to 01/07/2012 Prior to 01/07/2012, India had been following the concept of Positive List wherein the services were specifically notified by the government in order to levy service tax on them. During this regime it was necessary to classify an activity in the list of services which were notified by the government. And if any activity fails to classify under any head, no service tax could be charged. In case of online information, data access, data retrieval etc. a particular provision was introduced vide Notification No: 4/2001 dated 09.07.2001. “ 65(105)(zh) ONLINE INFORMATION AND DATABASE ACCESS AND/OR RETRIEVAL SERVICES”

Penalties under Service Tax Law

Finance Act 2015 has drastically amended the penalty provisions under the Finance Act 1994 (Service Tax law) in order to ensure nondiscriminatory form of penalties. Earlier penalties u/s 76 (for short payment of S/Tax) and u/s 78(Suppression of facts) used to be at Rs 100/- per day or 1% per month whichever is higher. This lead to the number of litigation upon the calculation of penalty. Finance Act 2015 has amended the same and the new provisions have been laid down. Summary chart of the new provisions is as follows:

Applicability of GST in case of Inter-State Supply of Goods & Services

-CA Keshav Garg

The government is showing the political will in enforcing GST law from April 01, 2016. In this scenario it becomes important to discuss about the provisions which would be applicable in case of interstate transactions. The122nd constitutional amendment bill proposes to introduce Integrated GST (IGST) (CGST + SGST)where one comprehensive rate of tax shall be charged on interstate supply ofgoods or provision of services. The IGST regime would do away with the "C" Form and "F" Form provisions. GST being a destination based consumption tax, IGST even being charged by center, SGST component shall be allocated to the importing state. The dealer of exporting state shall be able to take the credit of CGST and SGST, which he has paid on his purchases.