Refund allowed irrespective of date of application if service tax wrongly paid

The Court held that if any service tax paid which is wrongly paid and not covered under leagality issue then such refund shall be allowed even if application filed is after one year from the relevant date. Refund allowed irrespective of date of application if service tax wrongly paid. 

Case: Geojit BNP Paribas Financial Services Ltd. vs. Commissioner of Central Excise

 

Facts:

The assessee was engaged in engaged in providing retail financial services like share stock and share brokering, marketing of IPO of companies and mutual funds, corporate advisory services etc. The assessee provided retail financial services to a foreign company. The payment from such foreign company was received in foreign exchange.

The assessee paid service tax on such service rendered. Further assessee noticed that as per rule, the place of provision in his case was outside India and therefore, it was not liable to pay service tax on the said transaction. Hence, refund was claimed by the assessee.

On this, Department was in favour of the assessee and thus, held that as service tax shall not be payable thus, was refundable. However, as the application of refund was made after one year from relevant date hence, department dismissed the claim.

Being aggrieved by the order, assessee appealed to the High Court.

 

Held:

The Court noticed that the service tax paid on the service rendered outside India was out of mistake as no service tax was to be paid on such transaction. The assessee paid tax by mistake thinking the same was covered by the law. However, Rule 3 of Place of Provision is outside the taxable territory. Hence, no service tax shall be paid on service provided outside India.

Section 11B deals with the claim of refund and interest thereon, if payment made consequent upon interpretation of law or adjudication, the levy.

In the present case, tax paid is not covered by the legality. Thus, Section 11B was not applicable. In addition, there was no dispute with regard to the fact that no service tax was leivable for the service provided by the assessee and therefore, writ filed was maintainable.

The Court concluded that refund irrespective of date of application shall be allowed.

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