Appeal allowed: Storage charges not subject to service tax. The appeal filed by M/s BA Research against the demand of service tax on storage charges was allowed by the Appellate Tribunal CESTAT AHMEDABAD. The ...
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Appeal allowed: Storage charges not subject to service tax.
The appeal filed by M/s BA Research against the demand of service tax on storage charges was allowed by the Appellate Tribunal CESTAT AHMEDABAD. The Tribunal held that the storage charges collected by the appellant for storage beyond the initial 3-month period were separate and optional services distinct from technical testing and analysis. As per the master service agreement, storage after the testing period is at the client's request and not an integral part of the technical services provided. Therefore, the demand for service tax on storage charges was set aside in the judgment pronounced on 22.12.2022.
Issues: - Demand of service tax on storage charges collected by M/s BA Research from their clients.
Analysis: The appeal filed by M/s BA Research against the demand of service tax on storage charges was considered by the Appellate Tribunal CESTAT AHMEDABAD. The appellant provides technical testing and analysis services to clients, and in some cases, stores relevant samples for a certain period on charges. The charges for storage after the initial 3-month period are separate from the technical testing fee. The master service agreement specifies that storage after the testing period is optional and at the client's request. The Tribunal noted that storage charges are collected only for storage beyond the initial 3 months included in the technical testing services. The impugned order's Article 10 clarifies that storage after 3 months is an independent and optional service, distinct from technical testing and analysis. The Tribunal disagreed with the contention that storage and technical testing are not mutually exclusive, emphasizing that storage charges beyond 3 months are separate and independent. Therefore, the charges for storage beyond the initial period cannot be considered part of technical testing and analysis services, leading to the appeal being allowed and the demand for service tax on storage charges being set aside. The judgment was pronounced on 22.12.2022.
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