#taxable service

CESTAT Chandigarh ruled that municipal corporations do not qualify as 'persons' under Section 65(105)(zzzm) of the Finance Act, 1994, for the period before 01.07.2012, exempting them from service tax on advertisement space sales. The decision sets a precedent for statutory interpretation of taxable entities, impacting revenue disputes involving constitutional bodies.

CESTAT Chandigarh holds that when a freight forwarder purchases ocean freight on a principal-to-principal basis and resells it with a markup, the transaction does not constitute a taxable 'Business Support Service' under the Finance Act, 1994. This clarifies the scope of taxable auxiliary services in logistics and benefits freight forwarders operating as principals, not agents, in international shipping arrangements.

CESTAT Chennai rules that revenue-sharing payments from licensees operating food and beverage outlets within a property do not constitute taxable Business Support Services under the Finance Act, 1994. This clarifies a critical boundary for mall operators and entertainment complexes, shielding them from service tax demands on ancillary commercial partnerships that lack direct operational control or support functions.

CESTAT Chandigarh ruled that advertising agencies must include wall rent payments in the taxable value of their services, as it is an essential cost directly tied to service delivery. However, printed flex costs are excluded if billed separately as goods and taxed accordingly, clarifying the boundary between service and supply in advertising contracts.

CESTAT Mumbai rules that placement fees charged by educational institutions to students-not employers-do not constitute 'manpower recruitment or supply agency service' under Section 65(105)(k) of the Finance Act, 1994. The decision clarifies that service tax liability arises only when institutions act as intermediaries for employers, shielding academic bodies from retrospective tax demands.

CESTAT Chandigarh rules that a corporate guarantee issued by an overseas parent company without monetary consideration does not constitute a 'taxable service' under service tax law. The tribunal quashed a ₹11.6 crore demand, holding that the reverse charge mechanism cannot apply where no service fee or benefit is exchanged, setting a precedent for cross-border financial arrangements.

CESTAT Kolkata rules that residential construction projects with fewer than 12 units are exempt from service tax under the Finance Act, 1994. The tribunal quashed the demand, holding that reliance solely on ST-3 form and bank statement comparisons without substantive evidence lacks legal basis, setting a precedent for audit compliance challenges.

CESTAT Ahmedabad rules that supplying water to vessels within port premises qualifies as a 'port service' under Section 65(82) of the Finance Act, 1994, making it liable for service tax even if characterized as a sale of goods. The ruling clarifies that reimbursement charges for such services attract tax obligations, impacting port operators and shipping entities.

CESTAT Kolkata holds that service tax demands cannot be sustained merely on Form 26AS or income tax returns without proof of taxable service, recipient, and consideration.

The CESTAT Hyderabad holds that service tax is not leviable on BE/BA studies provided to overseas clients if the benefit accrues abroad, even when all activities occur in India.