No service tax liability on license fee and other fee for grant of liquor license

Last updated: 04 March 2021
Quick Summary
The Bangalore CESTAT has ruled that companies are not liable to pay service tax on fees paid to the State Excise department for obtaining a liquor licence. The tribunal found that these fees are not consideration for a service but rather a price for an exclusive privilege granted by the State. However, the ruling did uphold a service tax demand on a storage licence fee for CO2.

Court :
CESTAT Bangalore

Brief :
The Hon’ble CESTAT Bangalore, in M/S. Anheuser Busch Inbev India Ltd. v. Commissioner of Central Tax [Service Tax Appeal No. 20374 of 2020, decided on February 18, 2021] held that no service tax under reverse charge mechanism is payable on the license fee and other application fee paid to the State Excise department for grant of liquor license. Further, confirmed the Service tax demand on Storage License fee for CO2 which the Appellant is liable to pay along with interest.

Citation :
Service Tax Appeal No. 20374 of 2020, decided on February 18, 2021

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