2026 (1) TMI 1520

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....4. On the ground that the activity of distributing mutual funds and realizing of commission on the same would amount to providing of 'Business Auxiliary' services, a Show Cause Notice was issued on 17.04.2008. After due process the lower authorities have confirmed the demand of Rs.1,11,502/- along with interest and penalty. Being aggrieved, the Appellant is before the Tribunal. 2. The Ld. Consultant appearing on behalf of the Appellant submits that the activity provided by the Appellant is exempt from payment of Service Tax on account of Notification No..13/2003-ST dated 20.06.2003. He submits that the Board had issued Circular No.66/13/2013-ST dated 05.11.2003 clarifying that commission earned on mutual funds would be liable for Service....

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....is apparently because when the Act was enacted in 1930 the concept of mutual fund schemes was not known. Mutual fund schemes, in our opinion would stand at par with stock and shares for the purpose of section 2(7) of the Sale of Goods Act and therefore, the mutual fund units have to be given same treatment available to sale and purchase of goods under Notification No. 13/2003-ST. As seen above, the definition of goods in section 2(7) of the Sale of Goods Act which is an inclusive definition is comprehensive enough to include every kind of movable property other than actionable claims and money 6. The Board vide Circular No. 66/15/03-ST. dated 5-11-2003 took the view that the activity involved in the sale and purchase of mutual fund....