Case Law Details
Bharat Sanchar Nigam Limited Vs Commissioner of GST & Central Excise (CESTAT Chennai)
The CESTAT Chennai has ruled in favor of Bharat Sanchar Nigam Limited (BSNL) by quashing the demand for service tax on telecom services for a specific period. The decision was based on the non-inclusion of an Explanation in Rule 5(1) of the Service Tax Rules.
BSNL, a Government of India undertaking, was paying service tax based on a tariff structure that did not include certain components. However, the tax authorities demanded service tax for the period 01.06.2008 to 31.03.2011 due to the non-inclusion of an Explanation in Rule 5(1) of the Service Tax Rules.
The CESTAT Chennai considered the issue and referred to an earlier decision in BSNL’s own case. The tribunal held that the Explanation, which required service tax to be paid on the gross amount collected from customers, was introduced only on 01.03.2011. As a result, the demand for the period prior to this amendment could not be sustained.
CESTAT Chennai’s ruling sets aside the service tax demand on BSNL for the specified period, providing relief to the company. The decision was based on the non-inclusion of the Explanation in Rule 5(1) of the Service Tax Rules before 01.03.2011.
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