Export of Services

Show-Cause Notice as Foundation: CESTAT Kolkata Clears a Rs. 144 Crore Reverse-Charge Demand Under the Place of Provision of Services Rules

A shipping company faced with a Rs. 144.27 crore reverse-charge service tax demand watched the department appeal the near-entirety of it after an adjudicating authority accepted the company's own reading of the Place of Provision of Services Rules. CESTAT Kolkata dismissed that appeal, holding that a show cause notice which asserts a rule applies without saying why the taxpayer's contrary claim is wrong cannot sustain either the demand or an extended period of limitation — and separately held that demurrage is not consideration for a service at all.