CESTAT: Service Tax Not Leviable on Unclaimed Amounts Written Off Without Evidence of Taxable Service

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Last updated: 01 September 2026
Quick Summary
The CESTAT has ruled that Service Tax cannot be levied on unclaimed or unpaid amounts that a company writes off, even if these amounts are recorded as income. The Tribunal found that simply transferring these balances to 'unclaimed' and later writing them off, in line with accounting practices, does not automatically mean they represent consideration for a taxable 'declared service'. Crucially, for an act to be considered a declared service, there must be an agreement and a flow of consideration in return for tolerating an act or situation.

Court :
New Delhi

Brief :
M/s National Engineering Industries Ltd. vs. Commissioner of CGST & Central Excise, Jaipur CESTAT New Delhi

Citation :
Service Tax Appeal No. 54884 of 2023

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1 Year PLAN
1999
(Excl. of GST ₹359)

2 Years PLAN
3499
(Excl. of GST ₹629)

BEST VALUE
3 Years PLAN
4999
(Excl. of GST ₹899)

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