Applicability of service tax on non-monetory benifits

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Querist : Anonymous

Querist : Anonymous (Querist)

16 June 2015 Sir,

I am working in a PSU (Public Sector Unit) where Central Industrial Security Force (CISF) is providing security services on which we are depositing Service Tax on all the monetory benefits provide to CISF eg:- Salary, Medical, PF, Allowances.
Now The Addl. Commissioner Central Excise and Service Tax issued a notice for deposit Service Tax on Non monetary benefits provided to CISF by my company like:-
1. Rent free accommodation in company owned houses
2. Vehicle provided to CISF which are owned by my company
3. Stationery and other consumables provided to CISF procured by my company.

The service Tax department now taking assumption that if these rent free accommodation was not provided to CISF officials than the CISF will charge HRA (House rent allowance)
so on this assumption Department issued us a notice to deposit Service Tax on Notional HRA which is actually not paid to CISF.
In the same scenario S.Tax department assuming market rent of vehicle owned by my company and charging service tax thereon
My question is whether this notice is justified and Service Tax Department can charged service tax on non monetary benefits provided to CISF and if no than kindly mention the act or case law please.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 June 2015 These are facilities owned by the company utilized by CISF in providing service for the company. Service tax need not be paid for utilization companies own facilities.
Other PSU contesting the issue by filing appeal.
See the link for case law.
http://www.ey.com/Publication/vwLUAssets/Tax_Alert_Free_supplies_for_construction_services/$FILE/Tax_Alert_Free_supplies_for_construction_services.pdf

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Querist : Anonymous

Querist : Anonymous (Querist)

26 June 2015 Sir,

Thank you for reply, kindly mention the case law reference please.