CESTAT, Chennai bench has in its recent ruling in the case of M/s Origin Learning Solutions Pvt. Ltd. v. Commissioner of Service Tax has held that not mentioning the credit availed in ST-3 returns is only a procedural lapse, which can be condoned and thus appellants are eligible for refund as claimed by them on the service tax paid by them under reverse charge mechanism on input services availed by them.
Facts of the Case:
- The Appellant M/s Origin Learning Solutions Pvt. Ltd. is engaged in providing Information Technology Services and are also exporting said services. The Appellant availed credit on the Service tax paid and applied for refund under Rule 5 of the CENVAT Credit Rules, 2004 for the period July, 2013 to September, 2013.
- The original authority sanctioned the refund claim. Against this, appeal was filed by the department contending that the appellants are not eligible for refund. The Commissioner (Appeals) vide order impugned herein allowed the appeal of the department holding that the refund sanction is erroneous that appellant is not eligible for refund to the tune of Rs.16,93,074/-. Hence this appeal.
Order of CESTAT:
- It is not in dispute that the Appellant is eligible for credit on the service tax paid by them under reverse charge mechanism on input services availed by them.
- Observed that the only reason for denying the credit is that they have not reflected such availment of credit in ST-3 returns for July, 2013 to September, 2013. However, the services having been exported, the Service tax paid on the input services used for export of services should be refunded to the Appellant as per Rule 5 of CENVAT Credit Rules. Further, the Appellant has properly accounted in their books of account.
- Not mentioning the credit availed in ST-3 returns is only a procedural lapse, which can be condoned.
In view of above deliberations the CESTAT held that the appellants are eligible for refund as claimed by them. The impugned order is set aside. The appeal is allowed with consequential reliefs, if any. and allowed the appeal.
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Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
