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M.P. Audyogik Kendra Vikas Nigam Appellant (Indore) Ltd. Vs. Principal Commissioner of Central Goods & Service Tax and Central Excise - (Customs, Excise and Service Tax Appellate Tribunal) (26 May 2023)

Demand under service tax on reverse charge mechanism has to be worked out and calculated transaction-wise and invoice-wise


Service Tax

In present case, the Appellant is engaged in providing taxable services under the category of “Renting of Immovable Properties, Manpower Supply Services, Legal professional and Consultancy and Rent-a-Cab Services etc. The issue in present case is whether demand of service tax under Reverse Charge Mechanism has been rightly raised on the Appellant?

The Appellant states that, the impugned order is non-speaking and unreasoned. The whole demand is bad as the same has been confirmed without making a proper verification with respect to the facts on record.

The show cause notice does not contain the gist of allegations for raising the demand on RCM basis. The provisions of service tax read with the rules thereunder do not provide for raising of demand on the basis of apparent difference in the figure of expenses in the balance sheet and the amount offered for service tax in the ST-3 Returns. The demand under service tax on reverse charge mechanism, has to be worked out and calculated transaction wise-wise and invoice-wise.

In absence of such exercise, the show cause notices is vague and fit to be held misconceived and mis-directed. The Appellant shall be entitled to consequential benefits in accordance with law. The impugned order is set aside. Appeal allowed.


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