OIDAR, Business Auxiliary Service or Club and Association Service services provided by NSDL are taxable: CESTAT

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The Customs, Excise and Taxes on Services Appeal Tribunal (CESTAT), while ordering the requantification of the request, considered that the online information and database access or recovery services (OIDAR ), business ancillary service or club and association service provided by National Securities Depository Ltd (NSDL) is likely to “provide and transfer information and data processing”, classified under (vii) banking and financial services such as defined in article 65 (12) of the 1994 finance law are taxable.

Information gathered by officers of the General Directorate of the Central Excise Zonal Unit in Mumbai to conclude that the appellants, NSDL did not pay the service tax on operating income collected as part of the service charge. transaction, custody costs, etc., by wrongly claiming exemption from the service tax in accordance with Circular advice n ° B.II / 1/200 / TRU of 09.07.2001. These sums received by the Appellants from the participating custodians appeared to be taxable in the “Banking and Financial Services” category.

The tribunal composed of judicial member SK Mohanty and technical member Sanjiv Srivastava while maintaining the contested order, but returns the case for re-quantification of the claim after having authorized the benefit cum tax value in accordance with Article 67 ( 2) of the 1994 Finance Law and amount of tax paid by appellants according to ST-3 returns for the relevant period filed by appellant.

First, the court found that the services provided by the appellant to the depository participants are suitable for “the provision and transfer of information and the processing of data”, which can be classified under (vii) banking and financial services such as defined in article 65 (12) of the finance law. , 1994.

Second, the extension of the limitation period in accordance with the provision of Article 73 (1) of the 1994 Finance Law, to demand the tax on services is invoked.

Third, the benefit of the cum tax value in accordance with subsection (2) of section
67 of the 1994 finance law is admissible for the appellants, as is the benefit of the tax already paid according to the ST-3 declarations filed by them, the case must therefore be referred to the contracting authority for a requantification demand.

Fourth, the interest claim under Article 75 of the 1994 Finance Law is justified.

Finally, the penalties imposed under Articles 75A, 77 and 78 of the 1994 Finance Law are justified but must be redefined in the light of the re-quantification of demand in de novo proceedings.

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