TaxTMI 
TaxTMI 
2018 (4) TMI 1335
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....astructure Limited (RMIL) who provides the state of art online trading plate from vide its web portal viz. www.reliancemoney.com to trade in securities. For the purpose of trading the investor is provided with pre - paid cards also known as limit cards of various denominations and the fee charged for such cards from the investor is income to the Appellant and M/s RMIL. 2. The Appellant have entered into agreement with M/s RMIL outlining the role of each of them in providing consolidate service to the investor. By virtue of agreement M/s RMIL was entrusted with the sole responsibility of collection of card fee including service tax for such consolidated service to the customer. It was agreed between the Appellant and M/s RMIL that 95% of th....
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....greement". Service tax is chargeable on the taxable service provided on gross amount charged by the service provider for such service provided for a consideration. Both M/s RMIL and the Appellant are independent companies and the payment of service tax has to be made by the Appellant. Hence the present appeal by the Appellant. 3. Shri Gopal Mundra, ld. CA appearing for the Appellant submits that the Appellant is providing stock broking service to the investors and not any service to RMIL. M / s. RMIL owns the website which is used by investor to do online trading for which RMIL collects the card fee. After retaining the 5% amount the remaining is transferred to the Appellant. The amount retained by RMIL is consideration towards infrastruct....
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.... 513 (SC). He further submits that entire fees collected by the RMIL pertains online access to service. The agreement between the RMIL and the Appellant entrusts the responsibility of collection of card fee attributable to the service provided by the Appellant and discharge the service tax on card fees on behalf of Appellant. He submits that in terms of Section 65 (7) of the FA "a person liable to pay service tax includes its agent". In the present case the Appellant is providing stock broking and related services to the investors and has entered into a facility agreement with RMIL for recovery / collection of the entire consideration for stock broking service provided to the investor and thereafter discharge the service tax liability on be....
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....ce. The issue is of revenue neutrality as whatever service tax is charged is available as credit. He further submits that the demands are hit by limitation of time as there has been no suppression or element of fraud and no deliberate attempt to evade taxes. 4. Shri Rishi Goyal, Ld. Addl. Commr. (AR) appearing for the revenue supports the impugned order and reiterates the g rounds of demand of the impugned order. He has also filed written submissions stating that the contention of the Appellant that the transaction should be considered as Principal to Agent by partially construing the agreement on the basis of consideration i s incorrect. Once a written contract exists, word s and meaning beyond the same cannot be brought into it to create....
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....e extended period is applicable as the show cause notice was issued within one year of the coming of the facts to the knowledge of the department. He submitted that the impugned order be upheld. 5. We have carefully considered the submissions made by both sides and perused the records. We find from the agreement dt.11.04.2008 that M/s RMIL is engaged in facilitating distribution of financial products and services through its network, including its website and its clients can deal into financial products through its website. The clients has to register themselves with RMIL for the services offered by RMIL and for such services fee is paid to M/s RMIL by the client. In turn M/s RMIL has entered into agreement with RSL Appellant under which f....
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.... service to investor. This amounts to confirmation of demand beyond the scope of show cause notice which is not permissible under law. Also it is to be seen that the amount of 95% has been received by the Appellant from M/s RMIL and not from the clients. M/s RMIL has already discharged tax on the said amount. The Appellant is not providing any service to the RMIL. RMIL collects card fees from the investors and discharges service tax on the total card fees collected. It retains only a part and transfers the balance to the Appellant. Thus in respect of receipt by the Appellant there is only one transaction i.e the services provided by the Appellant to the investor and service tax has been discharged by RMIL on behalf of Appellant. Once the se....