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26.05.2012 - Voice of CA Presents - Updates
Saturday, May 26, 2012

  I.  Today's News:   

  1. IT Notification No. 18 - Income-tax (6th Amendment) Rules, 2012-Other method of determination of arm's length price  (Click for detail)

  2. Income Tax department working on strategy to prevent corruption  (Click for detail)

  3. Foreign companies pulling more money out of India, says Nomura  (Click for detail)

  4. India, Netherlands amend DTAC to pave way for information sharing  (Click for detail)

  5. P Chidambaram inaugurates modern immigration project  (Click for detail)

  6. Yes, decision-making has stalled: Kaushik Basu  (Click for detail)


II.  Useful Presentation & Case laws on Service Tax:

[ Contribution by CA Puneet Goyal, and contributor is available at email-id: ]


(Please click here for detail)


(II).  SOUTH CITY MOTORS LTD. Vs. COMMISSIONER OF SERVICE TAX, DELHI(CESTAT DELHI) Final Order No. ST/602/2011(PB), dated 22-11-2011 in Appeal No. ST/493/2010 (Partly In Favour of Assessee)

Brief Fact of the Case:

1. The Appellants are dealers of Ford Motor vehicles and they had entered into agreements with different banks and also with Non-Banking Financial Companies to market car-loan to potential customers. For loan taken by the customers, these appellants got commission from the banks and NBFCs. The issue in this appeal is whether service tax is to be paid on such commission categorizing the activity of the Appellants as “business auxiliary service”.

2. Definition of BAS services had been substituted wef 10.09.2004 and in substituted definition services of commission agent were expressly included and since then only assessee started paying service tax.

3. Assessee also contended that services provided by them were taxable under Business Support Services and not under Business Auxiliary Services


1. In para 11 & 12 tribunal held that services provided by assesse prior to 10.09.2004 were also taxable services under Business Auxiliary Services

2. This matter relates to scope of the entry for “Business Auxiliary Services”. There was considerable doubt about its coverage because of the very nature of the entry. There are contrary decisions of the Tribunal in the matter. The Higher Courts have been taking the view that in such situations the extended period of time cannot be invoked for raising demand. In this case also the demand is raised beyond the time limit of one year and such demand cannot be sustained. However, demand if any, which is within the normal period of one year is sustainable. Interest is payable on such amount but no penalty is imposable. (Para 13)

(Please click here for judgment)


(III).  RAJ RATAN CASTINGS PVT. LTD. Vs. COMMISSIONER OF CUS. & C. EX., KANPUR (CESTAT DELHI) Final Order No. ST/574/2011(PB), dated 18-10-2011 (In favour of assessee)

Brief Fact of the case:

1. The appellant is a distributor of mutual fund units and receives commission from mutual fund companies or asset management companies. The commission received by the appellants from the said companies stand taxed by the authorities below on the ground that they have provided Business auxiliary services to the mutual fund company.

2. As per Rule 2(1)(d)(vi) of Service Tax Rules, 1994 “Person liable for paying the service tax “means, - in relation to business auxiliary service of distribution of mutual fund by a mutual fund distributor or an agent, as the case may be, the mutual fund or asset management company, as the case may be, receiving such service;


1. In terms of provisions of Rule 2(1)(d)(vi), we find that such liability stands shifted to the recipient of the services i.e. the mutual fund company. We agree with the learned advocate that the said legal issue does not stand dealt with by the learned Commissioner (Appeals). (Para 6)

2. If that does not stand paid by the company, proceedings have to be started against the companies itself and the fact whether they have paid or not paid will not transfer the liability to the mutual fund distributor. (Para 7)

(Please click here for judgment)


III.  Tenders Info.: 
  1. Public Health Engineering Department
    CA Firms for preparing Audit Reports F.Y. 2011-12 & 2012-13
    (Click for detail)

  2. Chandigarh Child And Women Development Corporation Ltd.
    Internal Auditors for the year 2011-11, 2011-12 & 2012-13
    (Click for detail)


Key of Success :

"A lamp does not speak; 
it introduces itself through its light. 
Similarly achievers never speak themselves
but their achievements speak for them"   


Thanks for your valuable time


"Voice of CA"  

CA. Sanjay 'Voice of CA' Agarwal
Mob: 9811080342,      
CA. Sidharth Jain, Co-Moderator  
CA. Mukesh K Bansal, Co-Moderator-FEMA 

CA. Avinash Gupta, Co-Moderator-International Taxation 


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