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December 2022

Service Tax

By Puloma Dalal | Jayesh Gogri | Mandar Telang
Chartered Accountants
Reading Time 8 mins
I.     HIGH COURT

18. Commissioner of CGST Delhi East vs. Anand and Anand
2022 (65) GSTL 137 (Del.)
Date of order: 1st August, 2022
 
Refund of unutilized credit admissible to exported legal consultancy services.

FACTS

The respondent, a law firm of legal practitioner, provides legal services to clients in India as well as outside India and specializes in providing services in the field of intellectual property services and exports 70 to 80 percent of its services. The short issue in the Revenue’s appeal related to whether the assessee should be allowed refund of unutilized CENVAT credit for the period from July 2012 to March 2015. The Revenue’s contention based on the sole contention was that for the legal services, the tax burden is on the recipient of service and hence such service is clearly excluded from the definition of “output service” as defined in Rule 2(p) of CENVAT Credit Rules, 2004 (CCR). Therefore, even when the said services are exported, CENVAT credit is not available on such exported services also.

HELD

The Court examined section 68(2) of the Finance Act, 1994 along with the definition of “output service” in Rule 2(p) of CCR, the definition of “exempt service” as per Rule 2(e) of CCR as well as Rules 5 and 6(7) of Service Tax Rules, 2004 (“the Rules”). As per Rule 5 of the rules for all
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