No Service Tax on Notice Pay as Employer Does Not Provide Any Service: CESTAT Chandigarh

Maruti Suzuki India Ltd Vs Commissioner of Service Tax (CESTAT Chandigarh) In Maruti Suzuki India Ltd v. Commissioner of Service Tax, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh considered whether amounts recovered by an employer from employees in the form of “notice pay” and “bond money” are subject to service tax under the Finance Act, 1994. The appellant is engaged in the manufacture of motor vehicles and parts. It employs various professionals under offer letters containing specific conditions. One condition requires employees to give sufficient noti...