No ST on Chit Fund business
THE Delhi High Court has quashed Entry against Sr. no. 8 of Notification 26/2012-ST which sought to levy service tax on chit-fund business, saying the act of a foreman, who conducts auction of chit amount among contributors, does not fall under the definition of "service" provided in the Finance Act, 1994.
Read the order for the drafting tips & placing of the Explanation described in the following words
++ It is the function of an Explanation to explain the meaning and effect of the main provision to which it is an Explanation and to clear up any doubt or ambiguity in it.
++ The Explanation, therefore, seems to offer a clue to the problem which appears to us to be a creation of the very confounding manner in which the definition is found to have been drafted.
++ If these rules of interpretation are applied, it appears that even if it is assumed that there is an ambiguity or doubt in the interpretation of the exclusionary part of the definition of the word "service" and as to what types of activities in relation to a transaction or money or actionable claim are exempted from the levy of service tax, that doubt or ambiguity gets cleared up on a careful examination of the implications of the Explanation 2.
We bring you this order today. See Breaking News.