Fast Track Auto Care (India) Pvt. Ltd. Vs Commissioner of Central Goods & Services Tax (CESTAT Allahabad)
The taxation landscape in India often poses intricate questions that have significant financial implications for businesses. One such critical issue was recently addressed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad in the case of Fast Track Auto Care (India) Pvt. Ltd. vs Commissioner of Central Goods & Services Tax. The Tribunal clarified that if Value Added Tax (VAT) is paid on goods used in repairs, no service tax can be levied on those goods. This article delves into the details of the case and its implications.
Facts:
An Investigation was conducted against M/s. Fast Track Auto Care (India) Pvt. Ltd. (“the Appellant”).
On the basis of scrutiny of the documents submitted by the Appellant, the Revenue Department (“the Respondent”) issued a Show Cause Notice (“the SCN”) demanding service tax on the value of material/spare parts sold by the Appellant during servicing of motor vehicles.
The Appellant filed reply of the SCN inter-alia contested the demand of service tax on sale material/spare parts. However, the Adjudicating Authority vide order (“Impugned Order”) confirmed the demand of service tax along with interest and imposed the penalty under Section 78 the Finance Act.
Aggrieved by the Impugned Order the Appellant filed an appeal before the CESTAT, Allahabad.
The Appellant contended that invoice clearly demonstrates that VAT has been charged on 100% value of spare parts, lubricants, oil etc. sold during the servicing of motor vehicles on which Sales Tax/VAT has been paid, cannot be included in assessable value and no Service Tax can be charged on the same.
Issue:
Whether service tax can be imposed on material/spare parts sold by the assessee during servicing of motor vehicles?
Held:
The CESTAT, Allahabad in Service Tax Appeal No.70752 of 2017 held as under:
