Demand of Service Tax on Ocean Freight under RCM notification is Ultra Vires

Sal Steel Ltd. Vs Union of India (Gujarat High Court)

A perusal of Section 94 shows that there is no power conferred upon the Central Government to make any Rules or Notifications for extraterritorial events; or in other words, for services rendered and consumed beyond the “taxable territory” i.e. beyond India. Obviously, the Act itself is not applicable to the territories other than India and therefore the Executives cannot have any power to make Rules for territories beyond India.

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