Service Tax
TRT-2025-
Cestat New Delhi
Date:-29-02-24
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 29 February 2024
Parties: M/s Almondz Global Securities Ltd. Vs The Commissioner of Central Excise (Appeals), Delhi-IV
Facts –
- The Appellant, M/s Almondz Global Securities Ltd., is engaged in trading of securities and is a registered member of Bombay Stock Exchange and National Stock Exchange.
- A show cause notice dated 19.04.2010 was issued to the appellant raising demand along with interest and penalty for not discharging the service tax liability on transaction charges and delayed payment charges received from the clients.
Issue –
- Whether service tax can be demanded on transaction charges and delayed payment charges received from the clients?
Order –
- The Tribunal observed that the transaction charges collected by the appellant are not in relation to the provision of taxable service but the same are collected from the clients and are remitted to the stock exchange. Therefore, applying the principle that any receipt other than brokerage or commission is not exigible to service tax under the category of stock broker service, the appellant cannot be saddled with the liability of service tax on the transaction charges.
- Further, the appellant had made payments to Stock Exchanges on behalf of their clients who delayed the payments against their transactions of securities and the appellant charged the DPC from the said clients by making debit entries in their ledgers which cannot be termed as consideration for the service rendered.
- Thus, it was held that no demand of service tax both can be raised on the appellant on account of transaction charges and delayed payment charges. The impugned order deserves to be set aside and the appeal is, accordingly allowed.
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