Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

Comments

Print   |    |  Comment

PJ/Case Laws/2011-12/1004

Whether tax paid on mediclaim insurance and group insurance policy taken for employees or staffs deniable as cenvat credit or not?

Prepared By:
CA. Rajani Thanvi &
Bharat Rathore

 
 
 
Case: - M/s Fiamm Minda Automotive Ltd. Vs CCE, Delhi-IIII
 
Citation: - 2011-TIOL-394-CESTAT-DEL.
 
Issue:-
 
  1.  Whether tax paid on mediclaim insurance and group insurance policy taken for employees or staffs deniable as cenvat credit or not?
  2. Whether credit deniable on CHA service where the goods are exported on FOB basis and ownership retailed till delivery of goods on board the vessel?
  3. Whether Rent a cab service use for transport of vendors and clients from guest house to factory, credit of service tax paid deniable or not??
  4. Whether insuring export of goods relates to business activity, tax paid on insurance of export goods deniable or not??
 
 
Brief Facts:- Appellant had taken credit on various services
  1. Tax paid on mediclaim insurance and group insurance policy taken for employees/ Staff,
  2. CHA services when goods are exported on FOB basis and ownership retailed till delivery of goods on board the vessel,
  3. Rent a cab service utilized for transport of vendors and clients from guest house to factory, and
  4. Tax paid on insurance of export goods.
 

Assessee filed an appeal against commissioner (Appeals) order and department also filed appeal against the same order in respect of certain aspects, which has been decided against the department.
 

Department’s Contention: - Department contention on each of the dispute are as follows:-
 
  1. Group Insurance/ mediclaim Policy:- The department aggrieved that the credit of the service tax paid on mediclaim insurance and group insurance policy taken for their employees/ staff who are not covered by the ESI has been disallowed on the ground that the same cannot be considered as input service in terms of the activities relating to business. The department also said that it is not mandatory for the appellants to take mediclaim policy and accident policy for their employees it is only a welfare measure and therefore it is not treated as business activities.
  2. CHA Service:- The Department challenging the allowing of credit on service tax paid on CHA services.
  3. Rent a Cab service: The Department aggrieved that the credit of the service of rent a cab on the ground that part of service has been utilised for transporting vendors and clients from the guest house to factory and vice versa.
  4. General Insurance for exporting the goods: The department challenging the allowing of credit on service tax paid on General insurance for exporting the goods on the ground that such activities should be treated only as additional business activities. The department pursue that this activity
 
Assessee’s Contention:  Assessee contention on each of the dispute are as follows:-
 
  1. Group Insurance/ mediclaim Policy:- The assessee submit that in respect of category of employees and officials who are not covered by the ESI, they are required to make compensation in the event of illness/ accident. As a prudent business proposition, they incurred expenses by taking mediclaim insurance and personal accident insurance and these expenditures are clearly in the course of business activities and should be treated as input service.
  2. CHA Service:- The assessee submit that as per Para 8.2 of the Boards Circular No. 97/8/2007 dated 23.08.07 the supply of goods for export was on FOB basis and there fore, ownership, possession associated with obligation relating to loss or damage of the goods till they are delivered on board the ship rest with the party and therefore CHA services should be treated as input service.
  3. Rent a Cab Service: The assessee submit that vendors and clients have been transported from the guest hous to factory and vice versa these activities should be treated as business activities in relation to the clearance of final products from the assessee’s factory and the clients are to enable to sell their products and naturally part of the business activities.
  4. General Insurance for exporting the goods:- The assessee submit that insurance for exporting goods is business activity and service tax credit on the same should not be denied to us. 
 
 
 

Reasoning of Judgment: -  The Hon’ble Tribunal heard the submissions of both side and the findings are as under on each of dispute:-
 

  1. Group Insurance/ mediclaim Policy:- The Tribunal held that the issue stands settled against the department by the decision given in Stanzen Toyotetsu India Pvt. Ltd. Vs. CCE, Bangalore [2009 TIOL-697-CESTAT-Bang]. There is a merit in the appeal filed by the assessee.
  2. CHA Service:- The Tribunal held that the assessee has shown that the goods have been exported on FOB basis and that the ownership is retained till the delivery of the goos on board the vessel until receipt of bill of lading.
  3. Rent a Cab Service: The Tribunal do not find any valid reason for interfere with the order of the  Commissioner (Appeals) in so far as the same relates to the extending the benefit of credit on the service tax involved in the rent – a – cab even when the cars used for transporting vendors and client.
  4. General Insurance for exporting the goods:- The Tribunal held that service tax paid on insurance relating the insurance of export goods treating the same as part of business activity. And do not find any valid reason for interfere with the order of the Commissioner (Appeals)

 

 
 
 

Decision: - Appeal of the department is rejected and the appeal of the assessee allowed.

---------------

 
Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com