Service Tax - service abroad, Tax in India - no tax prior to 18.4.2006 - SCN quashed – High Court
EVERYONE will remember Indian National Shipowners Association v. Union of India (UOI (), except Revenue. For the rest of the world, the issue is settled as the SLP filed by Revenue is dismissed. The Department seems to be still anxious to agitate the issue – for them the Supreme Court is not the final appellate authority!
Referring to the Indian National Shipowners case, an audacious Commissioner wrote in his Adjudication Order – “The issue of taxing the receiver in the case of service received from abroad has been a subject matter of litigation and different views were expressed in the matter by the judicial fora at various points of time. Be it as it may, the fact remains that there exists a statutory provision in the form of Rule 2(1)(d)(iv) w.e.f 16.8.2002!!!!
Hundreds of cases are pending in the Tribunal and with Commissioners on this issue.
But last week the Delhi High Court quashed a Show cause Notice on this issue.
The High Court observed that it is no longer a debatable issue inasmuch as this Court in the case of Unitech Limited v. Commissioner of Service Tax, Delhi: (), following the decision of the Bombay High Court in the case of Indian National Shipowners Association v. Union of India ( UOI (), held that the provisions of Section 66A would be applicable only from 18.04.2006 and that prior to that date, services rendered by a non-resident service provider to a resident recipient could not be taxed as a service at the hands of the resident recipient.
And quashed the SCN . So next time you get an SCN on the issue, don't reply to it – go to the nearest High Court.
We bring you the High Court order today. Please see Breaking News.