Bank of India Vs Commissioner of GST and Central Excise (CESTAT Chennai)
CESTAT Chennai held that the service tax not leviable on Indian Bank on the commission charges in respect of granting credit facility to Foreign Service recipient. Accordingly, tax paid allowed as refund provided Indian Bank has not recovered service tax from Foreign Service recipient.
Facts- The appellant had issued Standby Letter of Credit (SBLC) in favour of M/s. Aban Singapore Pte. Ltd., which is a subsidiary of M/s. Aban Offshore Ltd. Chennai. The above SBLC was issued to Bank of India, Singapore Branch for a period of seven years as security for all payment obligations of M/s. Aban Singapore Pte. Ltd. It appears that M/s. Aban Singapore Pte. Ltd. had paid commission to the Bank on quarterly basis in convertible Foreign Exchange. The Bank remitted the service tax on the commission received from M/s. Aban Singapore Pte. Ltd. When the Bank has realised that it was not liable to pay service tax on the commission so received in terms of provisions of Export of Services Rules, 2005, the service tax paid has been claimed as refund.
After the due process of adjudication, the Original Authority has rejected the entire refund claim filed for Rs.20,84,750/-, holding that the appellant has not complied with the provisions of Export of Services Rules, 2005.The refund claim filed by the appellant was found to be ineligible for the service tax paid on the commission received from M/s. Aban Singapore Pte. Ltd.
