GST authorities drop Rs 7 crore service tax demand against CCI

GST authorities drop Rs 7 crore service tax demand against CCI

GST authorities have dropped a Rs 7.08 crore service tax demand against the Competition Commission of India (CCI) saying the statutory body does not render any taxable service. The CGST commissioner audit passed the order on an appeal filed by the competition watchdog against the show cause notice by Directorate General of GST Intelligence (DGGI), Delhi zone.

The DGGI had issued the show cause notice in 2020 on the basis on an "intelligence report" that the CCI is not paying service tax on the fees/consideration received by it while providing the services to various persons. It was stated in the show cause notice that the CCI was collecting fees from persons or enterprise that approached them for various purposes like acquisitions, mergers, or amalgamations, but have not registered under the Finance Act, nor discharged their service tax liability.

Following that the CCI approached the adjudicating authority Commissioner of CGST & Central Excise, Delhi Audit-1 and obtained a favourable ruling. The adjudicating authority ruled that CCI is a body constituted by an Act of Parliament and its accounts are audited by the CAG.

The CCI is not involved in rendering any taxable service. "Hence the liability related to non-filing of return doesn't arise," the order said, dropping the service tax demand totalling Rs 7.08 crore.