Service tax on NSDL/CDSL fees waived at pre-deposit stage where charges were recovered on an actual basis.

CESTAT Ahmedabad held that, for stock broking services, NSDL/CDSL fees recovered from customers on an actual basis were prima facie covered by the Board circular excluding such depository charges from service tax. It found that the fact that the amounts were described as fixed charges did not by itself take them outside the circular, since fixed amounts may still reflect actual basis recovery. On that basis, the Tribunal waived the pre-deposit requirement unconditionally and granted stay, with the appeal directed to be listed for final disposal.

---

---

Issues: Whether pre-deposit of the service tax demand and penalties was to be dispensed with in light of the Board circular regarding exclusion of NSDL/CDSL fees recovered from customers on actual basis.

Analysis: The dispute concerned the taxable value in stock broking services. The Tribunal noted the Board circular stating that service tax would not be leviable on NSDL or CDSL fees paid to depositories and recovered from customers on actual basis. The appellate authority had declined the benefit of the circular on the ground that the charges paid to NSDL were fixed charges, but the Tribunal observed that fixed amounts can also be on the basis of actual and treated the issue as prima facie covered by the circular.

Conclusion: The pre-deposit condition was waived unconditionally and the stay petition was allowed, with the appeal listed for final disposal.

---