Case Law Details
PVR Limited Vs Commissioner of Service Tax (CESTAT Delhi)
In a recent decision by the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Delhi, PVR Limited emerged victorious in a dispute against the Commissioner of Service Tax regarding the demand for service tax on the sale of food and beverages at their cinema halls. The CESTAT Delhi, in its order, set aside the Order-in-Original passed by the Commissioner of Service Tax and ruled in favor of PVR Limited. This article provides a comprehensive overview of the case and the key arguments considered by the tribunal.
Background: PVR Limited, a leading multiplex chain operating under the brand name “PVR,” primarily engages in the exhibition and screening of movies in theaters. In addition to movie screenings, PVR offers the facility of selling food and beverages through counters and stalls set up in the common lobby of its multiplexes. The dispute arose when the Directorate General of Goods and Service Tax Intelligence (DGGSTI) conducted an investigation, alleging that PVR had not paid the due service tax on the sale of food and beverages.
Legal Proceedings: The Commissioner of Service Tax issued show cause notices to PVR, leading to a demand of Rs. 24,91,84,110 for the periods 2013-2014 and 2014-2015. The demand was based on the assertion that the service portion in the supply of food and beverages by PVR is a taxable service under Section 66E (i) of the Finance Act, 1994.
PVR contested this demand, arguing that the activity of selling food and beverages in cinema halls is a pure transaction of sale and does not involve any significant service element. The case reached the CESTAT Delhi, where both parties presented their arguments.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
dining restoreant has to pay service tax as they provide service .or when cold drink is sold on higher price then mpr and they say to avoid law of maximum retail price , we give service also. now they will pay