Anheuser Busch Inbev India Ltd. Vs Commissioner of Central Tax (CESTAT Bangalore)
The Hon’ble CESTAT Bangalore, in M/S. Anheuser Busch Inbev India Ltd. v. Commissioner of Central Tax [Service Tax Appeal No. 20374 of 2020, decided on February 18, 2021] held that no service tax under reverse charge mechanism is payable on the license fee and other application fee paid to the State Excise department for grant of liquor license. Further, confirmed the Service tax demand on Storage License fee for CO2 which the Appellant is liable to pay along with interest.
Facts:
M/S. Anheuser Busch Inbev India Ltd. (“the Appellant”) is engaged in manufacture and sale of alcoholic beverages. Pursuant to the enquiry initiated by the Directorate General of Central Excise Intelligence, Bangalore (“DGCEI”), a Show Cause Notice dated June 18, 2018 (“SCN”) was issued to the Appellant, inter alia, demanding Service tax of INR 17,77,85,108/- under reverse charge mechanism on the certain amount paid towards license fee and other application fee (including Export Pass fee, Import Pass fee, Permit fee, Excise Staff Salary and overtime allowances/charges etc.) to the State Excise department for grant of liquor license. It alleged that the fees paid by the Appellant are with respect to the purported service provided by the State Government for which the Appellant is liable to pay Service tax under reverse charge mechanism on same.
Thereafter, the Commissioner (“the Respondent”), vide order dated March 18, 2020, confirmed Service tax demand of INR 4,89,95,805/- with respect to Export Pass fee and Import fee, Storage License Renewal fee, Excise Staff Salary & Overtime charges and Permit fee paid to the State Excise department. Further, dropped the demand with respect to Brewery License Fee, Bond Registration Renewal Fee, Factory License Renewal Fee, Brand Registration Fee, Barcode Fee, Bottling Fee and Appeal Filing Fee.
Aggrieved by the Service Tax demand confirmed by the Respondent, the Appellant has filed the present appeal.
Issue:
Whether the Appellant is liable to pay Service tax on the license fee and other application fees charged for grant of liquor license paid to State Excise department?
Held:
The Hon’ble CESTAT Bangalore, in Service Tax Appeal No. 20374 of 2020, decided on February 18, 2021 held as under:
