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December 2023

Service Tax

By Puloma Dalal | Jayesh Gogri | Mandar Telang, Chartered Accountants
Reading Time 3 mins

I. SUPREME COURT

Commissioner of CGST, CST, Delhi East vs. Haldiram Marketing Pvt. Ltd.

2023 (11) Centax 23 (S.C.)

Date of Order: 25th September, 2023

Service tax cannot be levied on the sale of packaged food over the counter as there was no service element and merely the sale of goods.

Service tax is not leviable on rent received from associate enterprises for the joint sale of goods; it merely amounts to sharing of rental expenses and not sub-letting of property.

FACTS

Respondent was engaged in the operation of food outlets of packaged foods on a take-away basis. An audit was conducted wherein it was observed that the assessee failed to pay service tax on the sale of take-away food items and on the share of rent received from the associate enterprise. Further, a SCN was issued proposing a service tax demand of Rs.23,09,45,317 with interest and penalty. Respondent submitted a reply to SCN for dropping the entire demand and explained that service tax was not required to be paid on the activities. However, the department issued an order demanding Rs.20,12,46,762 with interest and pena

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