Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: TDS :: cpt :: ACCOUNTING STANDARD :: due date for vat payment :: articles on VAT and GST in India :: list of goods taxed at 4% :: VAT RATES :: Central Excise rule to resale the machines to a new company :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: ACCOUNTING STANDARDS :: VAT Audit :: TAX RATES - GOODS TAXABLE @ 4% :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes
« Service Tax »
 Chidambaram says there cannot be multiple tax slabs in GST
 Service tax officials transferred for favouring realtor
 GST, a challenge and opportunity for accounting professionals’
 Service Tax On Hotels And Restaurants – Recent Delhi High Court Judgment
 GST Council discusses 4-tier tax rate, cess on demerit goods
 Why you shouldn’t miss these three simple tax saving options beyond Section 80C
 Determination of value for transactions between the Related parties under GST Laws.
 Higher collections can offset GST losses
 GST to subsume over a dozen Central, State taxes
 Incidence of indirect taxes won't go up under GST
 Advanced Budget date: Absence of a GST rate may present estimation challenges

No service tax can be levied on chit business: Delhi HC
May, 07th 2013

The Delhi High Court has quashed the Centre's notification to levy service tax on chit-fund business, saying the act of a foreman, who conducts auction of chit amount among contributors, does not fall under the definition of "service" provided in the Finance Act.

"We have come to the conclusion that no service tax is chargeable on the services rendered by the foreman in a business chit fund on an interpretation of the statutory provisions," the bench of justices B D Ahmed and R V Easwar has said in a recent judgement.

"The notification of June 20, 2012 issued by the Government of India, Ministry of Finance (Department of Revenue) is quashed," the court said.

The court's verdict came on the plea of Delhi Chit Fund Association seeking quashing of a provision under the Finance Act, 1994, which was made applicable from July 1, 2012, to make chit business taxable under the new law.

Discussing the provision and the relevant case laws, the court said "in a chit business, the subscription is tendered in any one of the forms of money as defined in section 65B(33)of the Finance Act.

"It would, therefore, be a transaction in money. So considered, the transaction would fall within the exclusionary part of the definition of the word 'service' as being merely a transaction in money.... Either way, there can be no levy of service tax on the footing that the services of a foreman of a chit business constitute a taxable service."

The provision of the Finance Act said that there shall be levy of service tax "at the rate of twelve percent on the value of all services" rendered by the chit fund firms.

The association of chit-fund firms, in its plea, had said "the notification should be quashed in so far as it seeks to subject the activities of a business chit fund companies to service tax to the extent of 70 percent of the consideration received for the services.

"The contention ... Is that there is no question of exempting a part of the consideration received for the services in chit fund business when the law provides that such services are not taxable at all in the first place."

The court, in its judgement, also gave the account of chit business and the way the foreman conducts the auction of chit amount among the contributors.

The foreman collects equal contributions from the members for a specified period every month and gives the money to a needy contributor who offers the "highest discount" to the chit amount.

The court, while quashing the notification, said the business of chit funds is strictly regulated by the Chit Funds Act that contained provisions to regulate the chit business including the rights and duties of the foreman.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Article Management Solutions System Article Management Software S

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions