Jurisprudentiol – Wednesday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Service Tax

Damned if you pay tax and damned if you don't - CESTAT sets aside order denying CENVAT credit of service tax paid before 18.4.2006.

FOR many years, the revenue was of the view that service tax on services received from outside India was to be paid even before the insertion of Section 66A in the Finance Act, 1994 with effect from 18.4.2006. Notices were issued demanding service tax in terms of Rule 2(1)(d)(iv) of the Service Tax Rules, 1994. Many assessees even paid the service tax before 18.4.2006 as they can take the CENVAT credit of the service tax paid under reverse charge. The dispute was finally settled in Indian National Shipowners Association case 2009-TIOL-129-SC-ST wherein it was held that no tax can be levied under reverse charge prior to 18.4.2006.

Now the revenue is on the revenge. They say that prior to 18.4.2006, whatever amount paid under reverse charge, no credit can be availed as the tax is applicable only from 18.4.2006 and the tax paid prior to 18.4.2006 is not tax and hence no credit is admissible.

Income Tax

Whether when Electricity Regulator fixes tariff, assessee is right in computing profit based on price paid to seller of power for purpose of computing Sec 80IA benefits - YES, says ITAT

THE issue before the Tribunal is - Whether when the Electricity Regulator fixes the tariff, the assessee is right in computing profit based on the price paid to the seller of power for the purpose of computing Sec 80IA benefits. And the decision goes in favour of the assessee.

See our columns Tomorrow for the Judgements