Service Tax under RCM applicable on Stock Exchange Fees: CESTAT

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Stock Exchange Fees charged by Singapore Stock Exchange is not a statutory levy and Service Tax under Reverse Charge Mechanism (RCM) is Applicable on the same.

Shri R. Subramanya, Advocate appeared for the Appellant, argued that Stock Exchange fees paid for securities trading and Singapore Stock Exchange at Singapore, being the statutory fees payable by any company cannot be taxable service under reverse charge mechanism. A further place of provision of service itself in a non-taxable territory so does not attract service tax under reverse charge.

As per Couram of Hon’ble Member (Judicial), Mr. Ramesh Nair And Hon’ble Member (Technical), Mr. P.Anjani Kumar it appeared that the Stock Exchange has charged fees to the appellant against the stock exchange service, therefore, in our considered view in the facts of this activity, the stock exchange of Singapore has provided the service to the appellant against stock exchange service, therefore, this clearly covers under taxable service and appellant is liable to pay tax under Reverse Charge Mechanism in terms of Section 66A read with Rule 2(1)(d)(iv) of Service Tax Rules, 1994.

Accordingly, the demand of Service Tax on stock exchange service was upheld by CESTAT.