No Service Tax Required to be Paid on Services Provided by An Authorised Person or Sub-Brokers to the Member of a Commodity Exchange in Respect of Such Taxable Service

on which the Service Tax was not Being Levied During the Period Commencing from The 10th Day of September 2004 and Ending with the 30th Day of June 2012 in Accordance with the Prevalent Practice

In exercise of the powers conferred by section 11C of the Central Excise Act, 1944 (1 of 1944), read with section 83 of the Finance Act, the Central Government hereby directs that the service tax payable on the services provided by an authorised person or sub-broker to the member of a recognised association or a registered association, in relation to a forward contract, shall not be required to be paid in respect of such taxable service on which the service tax was not being levied during the period commencing from the 10th day of September 2004 and ending with the 30th day of June 2012 in accordance with the prevalent practice.

The Central Government is satisfied that a practice was generally prevalent regarding levy of service tax (including non-levy thereof), under section 66 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as ‘the Finance Act’), on services provided by an authorised person or sub-broker to the member of a recognised association or a registered association, in relation to a forward contract, and that such services were liable to service tax under the Finance Act, which was not being levied according to the said practice during the period commencing from the 10th day of September 2004 and ending with the 30th day of June 2012.

Service tax exemption on intermediary services to commodity exchange members confirmed where prevailing practice led to non-levy. Service tax is not required to be paid on taxable services provided by an authorised person or sub-broker to a member of a recognised or registered commodity exchange in relation to a forward contract where a generally prevalent practice resulted in non-levy; the Central Government, under section 11C of the Central Excise Act read with section 83 of the Finance Act, directs non-payment for the period covered by that practice.