The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi has ruled that a service’s taxability must be determined according to the provisions applicable to the relevant period, and not on the basis of how it was treated in earlier years.
A two-member bench of Ms. Binu Tamta (Judicial) and P. V. Subba Rao (Technical Member) observed that the Commissioner (Appeals) wrongly relied on provisions from the pre-2012 service tax regime, despite the fact that the disputed period was May 2015 to April 2016 — well after sweeping changes in service tax law took effect on June 1, 2012.
“A service will not become either taxable or exempted simply because it was taxable or exempted at some time in the past,” the bench clarified in its order.
The judgment came in a dispute over a refund claim of ₹1.39 crore filed by the Institute for Studies in Industrial Development (ISID). The policy research body, based in Vasant Kunj, had paid service tax on activities such as online database access, short-term hostel and conference hall rentals, and property-related services, before seeking a refund in 2016 on grounds that these were not taxable.
While the Assistant Commissioner had initially rejected the refund in 2018, the Commissioner (Appeals) later overturned the decision and allowed ISID’s claim. This order was challenged before the Tribunal.
Under the amended framework, service tax became applicable to all services except those specifically listed in the Negative List under Section 66D of the Finance Act. The Tribunal emphasized that past treatment of services has no bearing on their current tax status.
The Tribunal set aside the order allowing the refund and remanded the case back to the Commissioner (Appeals) for a fresh decision based on the correct legal provisions.
Case Details
Case Title: Principal Commissioner, GST South Versus M/S. Institute For Studies In Industrial Development (ISID)
Case No.: Service Tax Appeal No. 50094 Of 2019
Date: 25.08.2025
Counsel For Appellant: Rajeev Kapoor, Authorised Representative
Counsel For Respondent: D.K. Nayyar, Consultant
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