Cooperative bank liable for service tax on banking services

The Appellate Tribunal CESTAT, New Delhi, held that a cooperative bank providing banking and financial services is liable to pay service tax under Section 65(12) of the Finance Act, 1994. The Tribunal directed the bank to deposit the duty amount within six weeks, with the waiver of penalty and interest upon compliance. A follow-up hearing was scheduled for verification of compliance and final disposal of the appeals.

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Issues: Liability of cooperative bank to pay service tax under Section 65(12) of the Finance Act, 1994.

The judgment by the Appellate Tribunal CESTAT, New Delhi, addressed the issue of whether a cooperative bank is liable to pay service tax under Section 65(12) of the Finance Act, 1994. The Tribunal noted that the appellant, a cooperative bank providing banking and financial services, contended that they did not fall under the category of services subject to service tax. However, referencing a previous case, the Tribunal held that even a cooperative bank falls under the definition of "any other body corporate, or any other person" in the relevant sections of the Finance Act, making them liable to pay service tax.

Furthermore, the Tribunal directed the appellant to deposit the entire duty amount within six weeks from the judgment date. Upon compliance with the tax deposit, the pre-deposit of penalty and interest was waived. The Tribunal scheduled a follow-up hearing for compliance verification and final disposal of the appeals on a specified date. The judgment was dictated and pronounced in an open court setting.

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