Service Tax
TRT-2025-
Cestat New Delhi
Date:-03-04-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 03 April 2023
Parties: M/s Ambuj Hotels & Real Estates Pvt. Ltd. Vs Director General of GST Intelligence
Facts –
- The Appellant, M/s Ambuj Hotels & Real Estates Pvt. Ltd., was alleged in the notice and confirmed in the order as “support services” provided by Indian Railways to the appellant, for which the appellant is said to have paid license fee during the period July 2013 to June 2017. Service tax has been demanded on this amount under a reverse charge. The support services that have been confirmed are infrastructural support, operational support and marketing support.
Issue –
- Whether the appellant is required pay service tax on license fee paid?
Order –
- The Tribunal observed that the taxability of the activity of providing licenses has been clarified by the CBIC Circular dated 11.10.2019. It states that the act of granting license is taxable only after 01.04.2016. Therefore, the grant of license is clearly not exigible to service tax before 01.04.2016 and has to be set aside.
- It clearly transpires that the license fee is based solely on the assessed sales turnover. It cannot be said that the license fee is quid pro quo for any support offered by the Railways. It also needs to be noted that license fee is paid as consideration for the service provided by the Railways to the appellant by way of grant of the authorization to provide catering service on the train.
- Hence the demand of service tax on the license fee paid by the appellant to the Railways with interest and penalty is set aside and the appeal is allowed.
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