The Bangalore Bench of the Customs, Excise and Service Tax Appeals Tribunal (CESTAT) has ruled that service tax cannot be levied on the amount of liquor license fees paid to the government of the state.
The department found that the appellant is liable to pay service tax on a reverse charge basis on various fees paid by the appellant to the State Department of Excise or to the government or government agencies in as part of their activities of manufacturing, importing and selling alcoholic beverages intended for human consumption. . As a result, a request has been made for the payment of various fees such as permit fees, import/export pass fees, excise escort fees, surveillance fees and other related fees. , additional fees paid in connection with the manufacture, import distribution and sale of alcohol.
The appellant argued that license fees, permit fees, import pass fees and export pass fees are payable to the state government to divest itself of its exclusive privilege to import, export and transport alcohol, which is in terms of entry 8 of Schedule-II of Seventh Schedule of the Constitution of India.
A bench of Mr. Ramesh Nair, Judicial Member and MP Anjani Kumar, Technical Member relied on the Tribunal’s decision in the case of Anheuser Busch Inbev India Ltd in which it was held that the Appellant is not bound to pay service tax on export pass fee, import pass fee, permit fee, excise staff salary and overtime allowance/cost and we set aside the demand on all these services. We upheld the CO2 storage license fee service tax claim that the appellant is required to pay with interest.
Awarding relief to the appellant, the Tribunal found that “Following the above judgment report, we are clearly of the opinion that the costs paid by the appellant to the State Government in the course of manufacture and trade liquor does not amount to the provision of any service. Accordingly, no service charge can be levied. Accordingly, the contested order is varied and the appeal is allowed with consequential relief, if any.”
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