2025-VIL-82-CESTAT-CHE-ST
  1. Home
  2. 2025-VIL-82-CESTAT-CHE-ST

SERVICE TAX CESTAT Cases

Service Tax - Rule 6(7B) of Service Tax Rules, 1994 - Profit on Foreign Currency Transactions, Sale of Foreign Currency to EEFC Account Holders - Appellant is an authorized dealer in foreign exchange - Demanding service tax on various foreign exchange related transactions of the appellant - Whether the Notification No. 27/2011-ST, which expanded the scope of exemption under Notification No. 19/2009-ST, would operate retrospectively - Whether the appellant was required to discharge service tax under Rule 6(7B) of the Service Tax Rules, 1994 on the gross amount of currency exchanged, instead of on the fixed service charge of Rs. 25 per transaction - HELD - The Notification No. 27/2011-ST, which substituted the words "a Scheduled bank, by any other Scheduled bank" with "any bank, including a bank located outside India, or money changer, by any other bank or money changer", was prospective in nature and could not be applied retrospectively. Except in matters of procedure, law is presumed to operate prospectively unless there is a compelling evidence to the contrary, which was not present in this case - the option provided under Rule 6(7B) is available to the assessee and not to the Revenue. Even if the Revenue's findings regarding the variance between the exchange rates applied by the appellant and the prevailing market rates were accepted, it would only indicate the existence of a "hidden consideration", which the Revenue should have determined and charged to tax under Sections 66 and 67 of the Finance Act, 1994. The Revenue cannot force the appellant to exercise the option under Rule 6(7B) - The appeal is partly allowed by upholding the Commissioner's findings on the retrospective application of the exemption and the taxability of "profit on settlement", but setting aside the demand on the sale of foreign exchange to EEFC account holders - Appeal stands partly allowed - Whether the "profit on settlement" arising from the sale and purchase of foreign currency denominated travellers' cheques and prepaid cards should be included in the taxable value – HELD - The findings of the Commissioner is upheld on this issue, as the substitution in the amending Notification No. 27/2011-ST was prospective in nature, and the appellant's transactions with other licensed entities were not entitled to the exemption prior to the amendment - Whether the profit on the sale of foreign exchange to holders of EEFC accounts is taxable - HELD - the transactions involving the sale of foreign currency to EEFC account holders do not involve any conversion activity, and hence, the profit earned on such transactions is not taxable under Section 65(12) of the Finance Act, 1994.
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Biweekly Tax Recap

By Dr. G. Gokul Kishore

Weekly Summary

VIL Video

Credit Notes ITC Reversal in IMS…
By Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?