Case Law Details
Deposit Insurance and Credit Guarantee Corporation Vs Commissioner (CESTAT Mumbai)
CESTAT Mumbai held that the deposit insurance activity of Deposit Insurance and Credit Guarantee Corporation, Mumbai (DICGC) falls within the ambit of section 65(105)(d) of the Finance Act, 1994 and is chargeable to Service Tax under “General Insurance Business”.
Facts- The assessee (M/s. Deposit Insurance and Credit Guarantee Corporation i.e DICGC) is a subsidiary of the Reserve Bank of India (RBI), which was established under the Deposit Insurance Credit Guarantee Corporation of India Act, 1961 for the purpose of ensuring the safety of deposits held in commercial banks, cooperative banks, Regional Rural Banks etc., by providing insurance of deposits and guaranteeing credit facilities.
DICGC insures all bank deposits, savings, fixed, current and recurring deposits up to the prescribed limit per deposit in a bank. DICGC pay service tax on the premium collected from the insured banks for insuring such deposits. For this purpose, DICGC is registered with the jurisdictional Service Tax Commissionerate vide registration No. AAACD2094ESD001, under the category of ‘general insurance business’ service u/s. 69 of the Finance Act, 1994.
The assessee after taking service tax registration on 28.03.2012 filed their first ST-3 return online on 25.04.2012 for the period from October 2011 to March 2012. It was found that DICGC had failed to pay appropriate service tax and also failed to pay interest on delayed payment of service tax resulting in the issuance of show cause notice proceedings.
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