TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Service tax liability on sub-brokers for commissions found unjustified. Appeals allowed with relief granted.</h1> <h3>VIJAY SHARMA & COMPANY Versus COMMISSIONER OF C. EX., CHANDIGARH</h3> VIJAY SHARMA & COMPANY Versus COMMISSIONER OF C. EX., CHANDIGARH - 2007 (7) S.T.R. 518 (Tri. - Del.) Issues:Service tax liability of sub-brokers for commissions received from main broker.Analysis:The appellants, acting as sub-brokers for a main broker, received commissions in connection with brokerage services. The service tax demands were confirmed against the sub-brokers on the basis that their commission is considered liable to service tax as 'stock broker service'. The main contention raised by the sub-brokers was that since the main broker had already paid service tax on the gross amount of commission received, there was no justification to impose a separate tax on the sub-brokers. It was also highlighted that in a similar case in another Commissionerate, a decision was made stating that sub-brokers' commission does not attract service tax.The learned SDR argued that sub-brokers are explicitly mentioned in the definition of Brokers/Stock brokers, indicating that the commission of sub-brokers is also subject to levy. However, upon reviewing the record and considering the arguments from both sides, the Tribunal found that the appeals needed to be addressed without requiring pre-deposits.The Tribunal analyzed the definition of the levy, emphasizing that it is related to the sale and purchase of securities. It was noted that in the present case, the main broker exclusively handled the sale and purchase of securities in the Stock Exchange, while the sub-brokers merely directed interested buyers to the main broker. Therefore, the levy was determined to apply only to the main brokers actively involved in the transactions at the stock exchange. Sub-brokers were deemed to be functioning more like commission agents rather than brokers in connection with the sale and purchase of securities. Consequently, the levy under consideration was deemed to be limited to stock brokers and not applicable to commission agents in general. As a result, the impugned orders were set aside, and the appeals of the sub-brokers were allowed with any consequential relief granted to them.
TaxTMI 