TaxTMI 
TaxTMI 
TaxTMI 
2023 (6) TMI 498
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....t Consultancy Service, Transport of Goods by Road and Intellectual Property Rights service. 2. On scrutiny of records, it was noticed that the appellant had entered into a Service Level Agreement (hereinafter refereed to as SLA) with their holding-company M/s. Stahl Holdings, BV, Netherlands and the appellant had been paying service tax under the head Management or Business Consultancy service on amounts received from their holding-company. In addition to the SLA charges, the holding-company at Netherlands had also collected VAT @ 19% from the appellant on which the appellant had not paid any service tax. On verification of documents and accounts of the appellant, for the year 2005 - 2009, it was noticed that the appellant has not included....
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....ices rendered along with 19% VAT payable thereon as per Dutch Regulations on monthly basis till February 2006. Subsequent invoices were raised on June 2006 for the period March 2006 to June 2006 and in December 2006 for the period July 2006 to December 2006. The value of the services and the VAT amount was separately shown in the invoices raised by the holding-company. Being a member of the European Union, tax laws in Netherlands required the holding-company to recover VAT from the service recipient at the rate of 19% which was shown separately in the invoices. After collection from the appellant, the amount being eligible for refund, was refunded to the appellant by the holding-company. The appellant has discharged service tax under revers....
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.... Shipowners' Association Vs. Union of India reported in 2009 (13) STR 235 (Bom). It is submitted that the said decision has been affirmed by the Hon'ble Supreme Court as reported in 2010 (17) STR J57 (SC). 6. The second submission put forward by the counsel is that being an associated enterprise, the liability to pay service tax on book adjustment is only with effect from 10.5.2008. For the period after 18.4.2006 and prior to 10.5.2008, being an associated enterprise, the appellant is liable to pay service tax only at the time of making payment and not on book adjustments. The statutory provision for demanding service tax in respect of the transactions between associated enterprises immediately on making book entry was introduced only ....
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....l that the appellant had discharged the service tax on the consideration paid by them to the holding-company situated in Netherland. The present demand is only on the VAT portion which is not a consideration for the services received by them. During the relevant period, the appellant was not liable to pay service tax under reverse charge mechanism as there was no provision in the Finance Act to collect the taxes from the service recipient. Even then the appellant has paid service tax on the charges excluding the VAT amount as per the SLA. In such circumstances, Show Cause Notice invoking extended period may be set aside. 9. The learned AR Smt. K. Komathi appeared for the department. It is submitted by the learned AR that the appellant has ....
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.... required to be set aside, which we hereby do. 13. Part of the demand is also confirmed from 18.4.2006 to July 2007. It is submitted by the learned counsel that the amounts were paid under book adjustments. So also VAT refunds were received by such book adjustments from their associated enterprise, situated at Netherland. The demand has been made on the book adjustments which are made prior to 10.5.2008. When the entries are made in the books of accounts of the appellant in respect of the amounts which are to be paid to the overseas entities, prior to 10.5.2008, there is no liability to pay service tax merely on such accounts. The provision to make such book entries taxable came into existence after the amendment in section 67 with effect ....