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April 2023

Service Tax

By Puloma Dalal | Jayesh Gogri | Mandar Telang
Chartered Accountants
Reading Time 3 mins
I. HIGH COURT 1 Commissioner of CGST vs. Shriram General Insurance C. Ltd Date of order: 19th January, 2022 Service Tax paid on re-insurance by the insurance company would be allowable as input service within the meaning of Rule 2(l) of the Cenvat Credit Rules, 2004 FACTS The assessee, an insurance company, deposited service tax on the insurance services. It had claimed input service credit for re-insurance services availed from other insurance companies. The department challenged the input service benefit claimed by the assessee on the grounds that the transaction comes to an end after issuing the insurance policy by the insurer and the same would not depend on re-insurance policy. The Appellate Tribunal passed its decision in favor of the assessee and hence an appeal was filed by department against the decision passed by the Tribunal before Hon’ble Court. HELD The High Court held that re-insurance is a statutory obligation and not a voluntary requirement. The assessee was entitled to CENVAT credit on the service tax paid which was necessary for its business to avoid double taxation. Relying on the decision of the Tribunal, the credit availed on re-insurance policy was held eligible. II. TRIBUNAL 2 SGS India Pvt Ltd vs. Commissioner of CGST, Thane Date of order
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