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2019-VIL-414-CESTAT-DEL-ST

SERVICE TAX CESTAT Cases

Service Tax - Liability of service tax on interconnection usage for SMS when no amount was charged and paid for providing Interconnection usage for SMS - whether for the period prior to November 2012, i.e. April 2011 to September 2012, when no charges were agreed upon and no amount was charged and paid, can it be said that the Appellant had rendered taxable service and were liable to pay service tax – HELD – the issuance of an Invoice pre-supposes and requires the existence of an agreement/ contract between the parties under which the parties have agreed upon a consideration/ charge/ price for a sale or service. An Invoice is a commercial document issued for debiting the recipient of goods/ service with the agreed price. This requires the existence of an agreed price. When there is no contract/ agreement, as in the present case and hence no price/ consideration is agreed upon, the question of issuing an Invoice for the same does not arise. Accordingly, in absence of such an agreement, the mere writing of letters by the Appellant calling upon the said Telecom operators to arrive at an agreement for a charge of 10 paise per SMS, and to pay the same, cannot constitute an Invoice - Since the point of taxation has not occurred under any of the clauses of the Rule 3(a) of the Point of Taxation Rules, 2011, the liability to pay service tax has not arisen - where service is rendered free without charging any consideration the same does not attract service tax - the impugned order is set aside and appeal is allowed

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