Whether preparation of bills and vouchers is covered under Chartered Accountancy service?

PJ/CASE LAW/2015-16/2655

Case:-COMMR. OF CUS., C. EX. & SERVICE TAX, TIRUPATI VERSUS MAGHAM PULLAIAH

Citation:-2014 (36) S.T.R. 1257 (A.P.)

Brief facts:-This appeal was admitted previously by this Court. However, no question was formulated. They, therefore, formulate the following question for decision.
“Whether the billing activity calculation undertaken at the behest of Chartered Accountant amounts to practising of registered Chartered Accountancy in order to levy Service Tax?”
In this appeal, the learned Tribunal has not decided anything independently, but has followed the earlier decision of the Tribunal in the case of C.C.E v. Umakanth & Co. (Final Order Nos. 1238-1240/2007), dated 24-10-2007 [2008 (9)S.T.R.527 (Tri.-Bang.)].

Appellant’s contention:-Learned counsel for the appellant submits that billing activity is part and parcel of the Chartered Accountancy profession. Unless these activities are undertaken, the professionals cannot discharge the duty to render service to their clients. Therefore, according to him, the Service Tax is completely applicable to Chartered Accountant, who is supposed to collect Service Tax, and he should pay.

Respondent’s contention:-Mr. Ravi, learned Senior Counsel for the respondent-assessee submits that the billing activity is absolutely a clerical activity and this is being undertaken by an Accountant and their Clerks. The duty of the Chartered Accountant is to examine and verify whether proper accounting has been done conforming to the provision of law. The faculty needed for carrying out the Chartered Accountancy profession is something superior to that of the faculty of a clerk who merely do this billing activity.

Reasoning of judgement:-They have heard the learned counsel appearing for the parties. They noticed that the learned Tribunal has relied on its own decision in the case cited above. In that case, it was held that the billing activity, which is undertaken at the instance and on behalf of a Chartered Accountant, is not the job of Chartered Accountant professionals. They find sound logic of this conclusion that the Chartered Accountant starts his functioning the moment accounts are complete. If the accounts are not complete, the Chartered Accountants ordinarily advise their clients to prepare proper accounts, and in support of these accounts vouchers and bills are required to be prepared. Chartered Accountants themselves do not prepare bills or vouchers. This is done by ministerial staff and clerks and that is not part of the job of the Chartered Accountant. As such, they accept the findings of the Tribunal. They, therefore, do not find any merit in this appeal.
The appeal is accordingly dismissed. There will be no order as to costs.
Consequently, miscellaneous petitions pending, if any, in this appeal shall stand closed.

Decision:-Appeal dismissed.

Comment:- The analogy of the case is that Chartered Accountants themselves do not prepare bills or vouchers. This is done by ministerial staff and clerks and that is not part of job of Chartered Accountant. The duty of the Chartered Accountant is to examine and verify whether proper accounting has been done conforming to the provision of law. Billing activity calculation undertaken at the behest of Chartered Accountant is not covered under the ‘Chartered Accountancy Service’ in order to levy service tax.

Prepared by:- Monika Tak

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PJ/CASE LAW/2015-16/2655

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