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TaxTMI 
TaxTMI 
TaxTMI 
2020 (2) TMI 569
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.... under Kerala Cooperative Deposit Guarantee Scheme, 2012 for administration of Cooperative deposit fund, by Government of Kerala, who notified the scheme vide S.R.O. No. 28/2012 with G.O.(P) No.03/2012/Co-op dated 11-1-2012, vide powers vested in them under Section 57(B) of the Kerala Co-operative Societies Act,1969. The minister in charge of Cooperation would be the chairman of the Board and all other members are nominated by the Government of Kerala. The contribution to the fund is the sum of money payable to the fund by the credit societies at the rate specified; the purpose of the scheme is to provide guarantee for the deposits made in the credit societies and for creating confidence among the depositors and for attracting more details;....
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....s the Banks and guarantees the deposits made by individual depositors up to Rs. 1 Lakh, the Board administers the fund and the guarantee is provided by the Government; the nature of collection of contribution to the fund is to create a corpus and not to levy a fee or provide a service to any business entity. The activity undertaken by the appellant which is under a Kerala Government scheme provided in tune with the Article 43B of the Constitution of India. 2.1 Learned Counsel further submits that in order to constitute a service, four elements must be there, the service provider, the service receive, actual service and consideration for the service; what is chargeable to Service Tax is not the transaction in money itself as it cannot be ....
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....t all other cases of 'transaction in money' shall be excluded from the charge of Service Tax. Learned Counsel further submits that the Commissioner has seriously erred in following the Education guide issued by CBEC ignoring the above Explanation. 2.2. Learned Counsel further submits that the finding of the Learned Commissioner that the activity of the appellant is 'service' is on an erroneous application of law in view of the well settled legal position as laid down by the Hon'ble High Court of Delhi in Delhi Chit Fund Association Vs UOI, 2013 (30) STR347 (Del.), which was adopted by the Hon'ble Supreme Court in UOI and Others Vs M/s Margadarshi Chit Funds Pvt. Ltd., etc (Civil Appeal No. 5724-5725/2011- decided on 04.07.2017), that the....
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....ing a corpus fund and therefore, no service is involved. The appellants vehemently claimed that the transactions they do with the Co-operative societies is that of transaction in money and as per Educational Guide to Service Tax issued by CBEC, transactions only in money or actionable claims do not constitute Service Tax. We have gone through the said Guide and we see that at Para 2.8.1 of the Circular referred to by the Advocate for the appellants, it is clarified that: 2.8.1. What kind of activities would come under 'transaction only in money'? • The principal amount of deposits in or withdrawals from a bank account. • Advancing or repayment of principal sum on loan to someone. • Conversion ....
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.... relied upon the case of Deposit Insurance and Credit Guarantee Corporation. The appellants argued that "it would be pertinent to note that the analogy of the Deposit Insurance and Credit Guarantee Corporation of India (DICGC) does not apply in the instant case. We find that Learned Commissioner has rightly observed that DICGC is also providing guarantee for the deposits made by the public in commercial banks. The only difference between the activity performed by DICGC and the appellants is that whereas the former is extending guarantee to the deposits made by the public in commercial banks, the appellant is extending guarantee in respect of deposits made by the public in Co-operative credit societies. The nature of the service is same. Lik....
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....n two parties in many cases, the insurer, the insured and the beneficiary, are also considered as coming under the category general insurance business and nothing has been brought before us to show that they are not so considered/understood in law. By the same logic, Deposit Insurance Contract is also a general insurance contract as defined in law and merely because they are statutorily prescribed, they do not cease to be contract of insurance. The insurer is the Corporation, the insured are the banks and the beneficiary is the depositor(s)". 7. In view of the above, we have no doubt, whatsoever, in our minds that the activity of the appellant is same as that of DICGC and if DICGC is liable to pay Service Tax so is the appellant liable t....