Katrina Kaif gets relief in Rs 2.79-crore service tax case

Bollywood actress Katrina Kaif has got relief in the Rs 2.79-crore service-tax case as a tribunal has ruled that this liability has been discharged by her agent for the modelling assignments she has done.

"In this case, appellant (Katrina) has appointed Matrix as her agent to discharge her service tax liability on her behalf and the same has been discharged by Matrix," said a recent ruling by the Mumbai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

The ruling follows an appeal by Katrina R Turcotte (Katrina Kaif) against an order of the service tax commissioner asking her to clear service tax liability of Rs 2.79 crore under the head classified as 'Business Auxiliary Service' The amount included an interest and penalty of Rs 33.68 lakh.

The service tax department had slapped the duty on her for providing services to various companies for promoting products through modelling assignments through advertisement films, TV commercials and still photography.

Katrina's lawyers said that she had discharged the service tax liability through her agent Matrix India Entertainment Consultants.

The revenue department, however, contended that the tax liability was discharged under 'Advertisement Agency Service' head and not under 'Business Auxiliary Service' category and hence Katrina was liable to pay the service tax.

The tribunal ruled that "by mere paying the service tax liability under wrong head does not mean that service tax liability has not been discharged.... We hold that the appellant has discharged the service tax liability through her agent....".