WHETHER INDIAN RAILWAY IS A PERSON IN SERVICE TAX

[RAJESH MANGAL AGRAWAL]

Dear all, In chhatisgarh, I have come across cases where SCN is issued to Railway as a service provider for "renting of immovable property service." Under sub-clause (zzzz) of section 65(105) of the Act, the taxable service is defined as any service provided or to be provided to any person, by any other person, in relation to renting of immovable property for use in the furtherance of business or commerce. I have come across several cases where the Railway is the service receipient and SCN is issued to service provider under different taxable services. Further in the taxable service of Transportation of Goods by Rail service upto 31.08.09 the taxable service read as under. "Taxable service means any service provided or to be provided to any person,by any other person other than Govt. Railways as defined in clause (20) of Section 2 of the Railways Act,1989, in relation to transport of goods in containers by rail, in any manner. W.e.f. 01.09.09 the amended section 65(105)(zzzp) of the Act defines the taxable service as follows: Taxable service means any service provided or to be provided to any person,by any other person ,in relation to transport of goods by rail, in any manner. This means that some how or other the CBEC & Service tax authority is of the opinion that Railway is a person & the service provided/received by the indian railway is also taxable. Kindly discuss this issues.

Regargs

CA. Rajesh Mangal

AI Summary

Service tax liability for Indian Railways contested; practitioners dispute whether it qualifies as a person for tax purposes.
Whether Indian Railways qualifies as a person for service tax is disputed: amendments to taxable service definitions led authorities to treat Railways as a taxable entity or service recipient in some SCNs. One view affirms Railways' liability as a person for service tax similarly to other taxes; an opposing view emphasizes that definitions in other tax statutes do not determine service tax characterisation and that statutory expressions and transactional context control whether Railways is a person rendering or receiving taxable services.