Hon’ble Allahabad High Court in the case of M/s Bhagwati Security Services (Regd.) Versus Union of India [2013 (11) TMI 649] on the following issue:
Issue:
Whether the service provider can get the reimbursement of service tax already paid by him, from the service recipient?
Facts of the case:
M/S. Bhagwati Security Services (Regd.), the Petitioner (“the Assessee” or “the Company”) was providing security services under the service Agreement (“the Agreement”) to BSNL. The Company deposited service tax to the Department on the basis of demand raised by the authorities. Thereafter, the Company
applied for reimbursement of service tax from BSNL, which was denied on
the ground that the same was not provided in the Agreement. The Company filed petition in the High Court.
Held:
The Hon’ble High Court after going
through the Agreement and other legal provisions of the Finance Act and
rules thereof held that:
- Service tax is statutory liability. It is a tax which is required
to be collected by the service provider from the person to whom service
is provided, and thereafter to be deposited with Government treasury
within the prescribed time.
- Thus, essentially the statute is being imposing the tax upon
the person to whom service is being provided and the service provider is
merely a collecting agency.
- BSNL (i.e. service recipient) directed to make reimbursement of service tax to the petitioner without further delay.