Electricity bill paid on behalf of client is not ‘Business Auxiliary Service’

Ninan Jacob Associates Vs Commissioner Of Central Tax (CESTAT Bangalore)

The issue under consideration is regarding classification of services, whether electricity bill paid on behalf of client can be classified as ‘Business Auxiliary Service’?

In the given case, the appellants have collected amounts from their clients for payment of statutory charges to Electricity Board, Municipal Corporation, etc., on behalf of the clients. Department has viewed this as ‘Business Auxiliary Service’.

CESTAT state that, in view of the decision of the apex court in case of Intercontinental Consultants and Technocrats Pvt. Ltd.: 2018 (10) GSTL 401 (SC), no service has been rendered by the appellant to the clients of the appellants in relation to promotion of business or marketing of the goods. Therefore, it is not considered as ‘Business Auxiliary Service’.

Hence, CESTAT hold that demand on this count is not sustained and service tax will not be levied on that transaction.

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