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India: Service tax liability and “revenue neutrality” defense

India: Service tax liability, "revenue neutrality"

The Customs, Excise and Service Tax Appellate Tribunal issued its findings in a matter concerning the imposition of service tax on “live feeds” of professional cricket matches over various TV channels.

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The taxpayer had failed to pay the service tax on the compensation remitted to the service providers (nonresidents). On assessment of the service tax liability, the taxpayer countered that the service tax would be available for collection as a CENVAT credit under a “revenue neutrality” position.

The tribunal held that if it were to accept the argument of “revenue neutrality,” then the entire system of paying taxes on a reverse charge basis would be futile.

The case is: BCCI v. Commissioner of Service Tax

Read an August 2018 report [PDF 564 KB] prepared by the KPMG member firm in India

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