Dosti Corporation Vs Principal Commissioner of Service Tax (CESTAT Mumbai)
CESTAT Mumbai Remands Dosti Corporation Service Tax Dispute for Fresh Adjudication on Pre-2010 Construction Services.
In a recent order, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in Mumbai has set aside a prior ruling against Dosti Corporation and remanded the case back to the original tax authority for a fresh adjudication. The dispute centers on a demand for service tax on “Construction of Residential Complex Services” provided by the company, which the tax department argues is liable for payment.
The central issue in the case is the timing of the tax levy. The service of “Construction of Residential Complex” became taxable effective July 1, 2010. Dosti Corporation contended that the construction activities in question were completed before this effective date. However, the payments for these services were received after the date of the levy. The tax department initiated proceedings, taking the position that the service tax liability was triggered by the date of payment receipt, not the date of construction completion.
The original adjudicating authority found against the company, stating that it had not provided sufficient documentary evidence to prove the work was completed before the levy’s effective date, as required by Rule 3 of the Point of Taxation Rules, 2011. The company, facing this adverse order, chose to appeal to the CESTAT.
