2026-VIL-1709-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax – Taxability of portal services as Online Information and Database Access or Retrieval service – Appellant, a joint venture formed to develop and manage the State Government's e-governance portal, provided a network through which citizens and government officers accessed and used government data, and collected fees on behalf of government departments, educational institutions and utility companies – Whether the services provided by the Appellant through the portal are Online Information and Database Access or Retrieval service for the period October 2009 to 30.06.2012 - HELD - OIDAR services can be alleged to have been provided only if the data belongs to the service provider. The service provider cannot provide access to data which it does not itself possess. The Appellant provided only a network through which the data of the State Government could be accessed by the officers of the State Government and by the citizens. Therefore, it cannot be said that the Appellant provided any OIDAR services. This view is supported by the decision of the Tribunal in United Telecom Ltd, against which the Revenue's appeal was rejected by the High Court, and by the decision of the Larger Bench of the Tribunal in Air India Ltd - The demand under OIDAR service is set aside and the appeal is allowed - Service Tax – Taxability of services to Government departments and educational institutions as business auxiliary service or business support service – Appellant collected utility bill payments and fees for Government departments, universities and educational institutions through the portal, and also provided data digitisation services to the State Urban Services Corporation – Whether the services provided to Government departments and to universities and educational institutions before 01.07.2012 are chargeable to service tax under business auxiliary service or business support service - HELD - The services provided to Government departments for collection of utility bills and to universities and educational institutions before 01.07.2012 were support services. These services were not provided to business entities. Therefore, they would not fall under the category of business auxiliary service or business support service. Hence, no service tax was payable on them. The services to corporations such as telecom companies and insurers were chargeable to service tax both before and after 01.07.2012, and the Appellant had paid service tax on the commission received on them. The fees charged from kiosk operators were construed as franchise fee on which the Appellant had paid service tax both before and after 01.07.2012 - The demand on these services is set aside and the appeal is allowed - Service Tax – Exemption to services provided to educational institutions after 01.07.2012 – Appellant provided portal services to universities and educational institutions for admissions and conducting examinations – Whether service tax is payable after 01.07.2012 on the portal income received from educational institutions - HELD - After 01.07.2012, all services became exigible to service tax except those in the negative list. Services provided to universities were covered by Exemption Notification No. 25/2012-ST, Entry No. 9(d). Therefore, no service tax was payable on them even after 01.07.2012 - The demand on portal income from educational institutions is set aside and the appeals are allowed - Service Tax – Taxability of interest on Fixed Deposits – Appellant collected utility bill payments, fees and statutory charges and was required to transfer the amounts to the concerned departments and institutions after one day or five days, and during this period it held surplus funds in fixed deposits which earned interest – Whether interest earned on Fixed Deposits is exigible to service tax during the pre negative list and post negative list regime - HELD - Since the Appellant was required to transfer the amounts collected only after one day or five days, it had at any point of time a lot of money in its fixed deposits and earned interest on the same. Interest is the time value for money. It is the consideration received for the money deposited with the bank and it is not consideration received for any service. Therefore, it is not exigible to service tax either during the pre negative list or post negative list regime - The demand on interest earned on Fixed Deposits is set aside and the appeals are allowed.
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