No Cola War this – Coke and Pepsi together win major case in High Court - Service Tax on advertising – eligible as input credit
It was a major victory for the Cola giants in the Bombay High Court.
It was held that advertising/marketing services and/or sales promotion services procured by manufacturers of ‘concentrates' for marketing aerated beverages are ‘input services' and the service tax paid thereon is available as input credit. In this context, the High Court extensively analyzed the definition of ‘input service', examined the scope of words and phrases like ‘means and includes', ‘such as', ‘activities relating to business' employed in the definition of ‘input service' and also discussed the relevance of inclusion of related costs in the assessable value of final products i.e. ‘concentrates' while arriving at this decision.
Earlier the Mumbai Bench of CESTAT - 2007-TIOL-723-CESTAT-MUM held that M/s Coca Cola India Pvt Ltd was not entitled to credit of service tax paid on advertisement/marketing services utilized for marketing of aerated beverages/waters since they are only engaged in the manufacture and sale of ‘concentrates'.
See this landmark judgement in our ST se GST Tak today.