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The CESTAT set aside ₹42 crore of service tax demands on MP Online Ltd., holding that OIDAR tax applies only when the service provider owns the data. It also ruled that interest on fixed deposits and educational services remain exempt from service tax.
CESTAT quashed a Rs 22.84 crore service tax demand against HCL Infosystems, holding that the services do not fall within the negative-list taxable categories and are not deemed sales or advertising agency services. The ruling narrows the tax base under the negative-list regime, benefitting IT service providers offering consulting, maintenance and related services.
CESTAT Hyderabad rules that NHAI’s assignment of toll collection rights to private contractors for fixed consideration constitutes a taxable service under the service tax regime, rejecting claims of sovereign immunity and negative list exemption. This sets a critical precedent for statutory authorities engaging in commercial activities, clarifying that public infrastructure operators cannot evade tax liability by masking revenue-generating contracts as sovereign functions.
CESTAT Hyderabad rules that penalty charges levied for delayed payment of DEMAT account maintenance fees constitute a 'declared service' under Section 66E(e), making them taxable even if structured as penalties. This clarifies that financial intermediaries cannot evade service tax by reclassifying contractual default fees as non-taxable interest-like amounts, impacting all stock brokers and depository participants.
The Customs Tribunal holds that recipient cannot be penalized for service provider's erroneous tax classification; Cenvat credit valid if tax was paid and accepted by authorities.
The CETAT holds that royalty and dead rent collected for mining leases are not taxable as renting of immovable property, as it constitutes a sovereign function under MMDR Act, 1957.