Case Law Details
Commissioner Of CGST & Central Excise Vs Deposit Insurance & Credit Guarantee Corporation (CESTAT Mumbai)
CESTAT Mumbai allowed the refund claim filed by Deposit Insurance and Credit Guarantee Corporations (DICGC) by considering premium amount paid by bank as inclusive of tax.
Facts- The respondent, as a wholly owned subsidiary of Reserve Bank of India was established as the insurer of banks to protect constituents of each bank from ‘run on their money’ for which banks pay a premium.
This appeal of Commissioner of CGST & Central Excise, Mumbai Central arises from the setting aside of the rejection of claim for refund of ₹ 158,11,16,024, paid ‘under protest’ following audit of the Deposit Insurance and Credit Guarantee Corporation (DICCGC) and objection raised thereon on value of ‘taxable’ services rendered between October 2011 and March 2013 by the competent authority, in order of Commissioner of GST & Central Excise (Appeals-II), Mumbai in challenge of the respondent herein. It appears that the claim of refund had been prompted by an order of the first appellate authority dated 11th January 2016 holding that the liability under Finance Act, 1994 would be duly discharged upon tax being remitted on the premium considered as inclusive of tax.
Conclusion- Held that they were aware that, in the absence of exemption, tax liability does lie and, in such circumstances, the tax would have to be borne from the premium itself. Furthermore, as set out in the grounds of appeal, they could not have collected any amount higher than the premium specified by the Reserve Bank of India (RBI) as their customers – the banks also bound under the supervision of the Reserve Bank of India – would not pay up any amount over and above the premium. Consequently, the consideration, and gross value, includes the tax amount and liability was to be computed only on the ‘cum tax’ value.
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