Corporate Housekeeping Services (India) Pvt Ltd Vs Commissioner of Service Tax (CESTAT Delhi)
In a recent service tax order Hon’ble CESTAT held that exemption to United Nations is general in nature and services provided to UNDP, UNICEF, UN Women, UN AIDS, UNODC, & UNOPS is available on the basis of Notification 16/2002-ST and mega exemption Notification No. 25/2012-ST dated 20.06.2012 itself.
Highlights of the judgement
√ There is no connection between exemption provided to United Nations and International Organizations as both are independent from each other.
√ Further, the reference to ‘The United Nations (Privileges and Immunities) Act, 1947’ in the definition of ‘Specified International Organisations’ is for limited purpose and has nothing to do with exemption provided to United Nations.
√ We hold that to avail exemption under the Notification No. 25/2012-ST dated 20.06.2012, one has to be either United Nations or a notified International Organization.
√ We note that the Mega Exemption Notification No. 25/2012-ST dated 20.06.2012 provides exemption to United Nations and there is no condition in this notification that any organizations/agency attached or affiliated to the United Nations also requires to be notified by Central Govt. under Section 3 of the United Nations (Privileges and Immunities) Act, 1947.
√ Hence, we hold that the exemption to United Nations is general in nature and services provided to UNDP, UNICEF, UN Women, UN AIDS, UNODC, & UNOPS is available on the basis of mega exemption Notification No. 25/2012-ST dated 20.06.2012 itself.
Hon’ble CESTAT held that as already noted supra, the six organs of the United Nations are represented by the various Funds and Programmes/Departments and Offices /Subsidiaries/ Functional and Regional Commissions and Other Entities etc, who have offices in India, making these essentially part of United Nations. These offices are provided various privileges and immunities under Indian Laws. It is seen that the Central Government vide the aforesaid notification granted exemption from payment service tax on all the taxable services to United Nations or a specified International Organization. As regards the ‘specified International Organization’ declared by the Central Government in pursuance of section 3 of the United Nations (Privileges and immunities) Act, 1947 (46 of 1947), we have already held that this clause is different from United Nations. Therefore, section 3 of the United Nations (Privileges and Immunities) Act, 1947 only talks about the other International Organisation which are separately notified by the Central Government. Further, the section 2 of the United Nations (Privileges and Immunities) Act, 1947 states:-
“2. Conferment on United Nations and its representatives and officers of certain privileges and immunities.-
(1) Notwithstanding anything to the contrary contained in any other law, the provisions set out in the Schedule to this Act of the Convention on the Privileges and Immunities, adopted by the General Assembly of the United Nations on the 13th day of February, 1946, shall have the force of law in India.
(2) The Central Government may, from time to time, by notification in the Official Gazette, amend the Schedule in conformity with any amendments, duly made and adopted, of the provisions of the said Convention set out therein.”
Therefore, section 2 of the United Nations (Privileges and Immunities) Act, 1947 provides privileges and immunities to the United Nations and its representatives and officers adopted by the General Assembly of the United Nations on the 13th day of February, 1946, wherein India is also member. There is no connection between exemption provided to United Nations and International Organizations as both are independent from each other. Further, the reference to ‘The United Nations (Privileges and Immunities) Act, 1947’ in the definition of ‘Specified International Organisations’ is for limited purpose and has nothing to do with exemption provided to United Nations. We hold that to avail exemption under the Notification No. 25/2012-ST dated 20.06.2012, one has to be either United Nations or a notified International Organization. We note that the Mega Exemption Notification No. 25/2012-ST provides exemption to United Nations and there is no condition in this notification that any organizations/agency attached or affiliated to the United Nations also requires to be notified by Central Govt. under Section 3 of the United Nations (Privileges and Immunities) Act, 1947. Hence, we hold that the exemption to United Nations is general in nature and services provided to UNDP, UNICEF, UN Women, UN AIDS, UNODC, & UNOPS is available on the basis of mega exemption Notification No. 25/2012-ST dated 20.06.2012 itself. The demand in this regard is accordingly is liable to be set aside.
