Demand of service tax cannot be raised when the tax liability has already been discharged under RCM

Last updated: 04 December 2024

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The CESTAT Ahmedabad has ruled that a service tax demand cannot be raised if the tax liability has already been discharged under the Reverse Charge Mechanism (RCM). In this case, the appellant, Utility Labour Suppliers, faced a demand for service tax due to discrepancies in declared service values. However, the tribunal found that the recipient of the manpower supply service had already paid the full tax liability under RCM. Therefore, raising a demand against the supplier would constitute double taxation, and the original order was set aside.

Court :
CESTAT, Ahmedabad

Brief :
The CESTAT, Ahmedabad in the case of Utility Labour Suppliers v. Commissioner of C.E.-Ahmedabad-II [Service Tax Appeal No. 10780 of 2022-DB dated November 26, 2024] held that demand of service tax cannot be raised when the tax liability has already been discharged under RCM.

Citation :
Service Tax Appeal No. 10780 of 2022-DB dated November 26, 2024

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1 Year PLAN - Rs.~~1999~~

1799

(Excl. of GST ₹323)

2 Years PLAN - Rs.~~3499~~

3149

(Excl. of GST ₹566)

BEST VALUE

3 Years PLAN - Rs.~~4999~~

4499

(Excl. of GST ₹809)

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Attached File : 671907_5802_utility_labour_suppliers.pdf

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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