Commissioner of Central Tax Vs Prakash Arts Pvt. Ltd. (CESTAT Hyderabad)
The appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad Bench, was filed by the Department against the order dated 18.10.2018, whereby the adjudicating authority had dropped proceedings initiated through the show cause notice dated 11.04.2018 against the respondent company and its Director and CEO. The dispute related to service tax liability under the Reverse Charge Mechanism (RCM) on licence fees paid to the Railways for use of railway premises for displaying advertisements.
The respondent was engaged in providing advertisement services through hoardings, billboards, signboards and similar display structures. It was registered under the category of “Outdoor Advertisement Services” and discharged service tax liability on the advertisement services provided to its clients. The Department, based on scrutiny of agreements entered into with South Western Railways and South Central Railways, statements of company officials, and other documents, concluded that the respondent had obtained licences from the Railways to display advertisements at railway stations and that the Railways were providing “Business Support Services” (BSS). Since the Railways were a government entity, the Department alleged that the respondent, as recipient of the service, was liable to pay service tax under RCM in terms of Notification No. 30/2012-ST.
