2024 (3) TMI 15

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.... the demand of service tax on transaction charges and delayed payment charges under the category of 'Stock Broker's Services' and 'Banking & Other Financial Services'. 2. The appellant is engaged in trading of securities and is a registered member of Bombay Stock Exchange and National Stock Exchange. The appellant is registered with the service tax department for rendering 'Stock Broker's Services' and 'Banking & Other Financial Services'. On the basis of the intelligence gathered by the service tax department, show cause notice dated 19.04.2010 was issued to the appellant raising demand of Rs. 32,21,550/- along with interest and penalty for not discharging the service tax liability on transaction charges and delayed payment charges rece....

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....) GSTL 357 (Tri.- Ahmd.); (iv) Indses Securities And Finance Ltd. Span Caplease Pvt. Ltd. and Others Vs. CST-Service Tax, Ahmedabad - 2018 (2) TMI 569 - CESTAT-Ahmedabad (v) VSE Stock Services Ltd. Vs. CCE & ST, Vadodara-II - 2014 (1) TMI 248-CESTAT Ahmedabad; (vi) M/s HFL Holding Ltd. Vs. Commissioner of CGST & Central Excise, Mumbai - 2024 (2) TMI 967 - CESTAT, Mumbai. 5. On the contra, the learned Authorised Representative referring to the decision of the Kolkata Bench in Shriram Insight Share Brokers Ltd Vs. Commissioner of ST, Kolkata, 2019 (26) GSTL 231 has submitted that on the issue of transaction charges the decision has been rendered in favour of the revenue holding that the same has to be included in....

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....tock brokers but deposited with the authorities concerned and hence such charges cannot form part of the taxable value. 7. In a recent decision in VSE Stock Services Ltd Vs. CCE & ST, Vadodara (supra), the Tribunal considering the issue whether the transaction/administrative charges collected from sub-broker is liable to service tax under the head of stock broker service, observed that all the charges on which service tax was demanded by the revenue are statutory charges which are collected from the sub-broker but the same was deposited to the stock exchange and therefore these charges were not collected as service charges by the appellant but only as reimbursement which was paid to the stock exchange and hence these charges cannot be co....

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....cation for inclusion of the same in the value of the services. To quote from the said decision : ' that such DPC collection has got nothing to do with the sale/purchase of the securities, a service which the appellant is rendering as a stock broker, but admittedly is a charge recovered from only those customers, who delayed the payments of the securities value and is in fact is a penal interest, for compensating the assesee for the payments already made by them , to the Exchange, on behalf of their clients." We find that in the aforesaid decision the Tribunal has categorically noted that the issue of delayed payment charges stands clarified by the CBECs letter dated 3.08.2011, where it has been observed as under: '2.1 I....