SBI Cards And Payments Services Pvt Ltd Vs Commissioner of Service Tax (CESTAT Chandigarh)
The Hon’ble CESTAT Chandigarh in SBI Cards and Payments Services Pvt. Ltd. v. Commissioner of Service Tax, Delhi [Service Tax Appeal No. 55319 of 2013 with 50192 of 2015 dated January 4, 2022] set aside the order confirming the demand for reversal of CENVAT credit on the amount written off as bad debts. Further, held that there is no such provision in the CENVAT Credit Rules, 2004 (CENVAT Credit Rules) or in the Finance Act, 1994 (Finance Act) for reversal of CENVAT credit for the services provided for which no consideration for service provided is received by an assessee.
Facts:
SBI Cards and Payments Services Pvt. Ltd. (“the Appellant”) is engaged in providing banking and other financial services, credit card, debit card etc., and business support services. The Appellant received various input services for providing their output services and availed CENVAT credit thereon. In some cases, the Appellant could not recover certain payments from their customers and wrote them off as bad debts in their financial records. The Appellant also entered into a co-brand credit card agreement with Indian Railway Catering and Tourism Corporation Limited (“IRCTC”) to launch co-brand credit card. The Appellant paid fixed charges to IRCTC for every subscriber of credit card and in turn the IRCTC agreed to promote the credit card by modifying its website, through press advertisements and related collaterals. IRCTC raised invoices on the Appellant for the said purpose and the Appellant availed the CENVAT credit of service tax paid thereon.
This appeal has been filed against the Order-in-Original dated March 31, 2017 (“the impugned order”) confirming the demand for reversal of CENVAT credit for the period April 2009 to March 2012, on the amount written off as bad debts and on advertisement & sales promotion services and denying CENVAT credit on input services received from IRCTC by classifying them as catering services.
Issue:
Whether the Appellant is liable to reverse the CENVAT credit on the amount written off as bad debts and on advertisement & sales promotion services?
Held:
The Hon’ble CESTAT Chandigarh in Service Tax Appeal No. 55319 of 2013 with 50192 of 2015 dated January 4, 2022 held as under:
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