Service recipient is liable to reimburse taxes to service provider, if any recovered from him by Department

Section 68, read with sections 66 and 66B of the Finance Act, 1994 and Rule 6 of the Service Tax Rules, 1994 - Payment - Service Tax - Assessee was providing security services to M/s. BSNL under an agreement - Later, service tax came to be demanded from assessee and assessee paid said amount - Assessee requested BSNL to reimburse service tax but BSNL denied same on ground that same was not contemplated in agreement - HELD : Service tax is statutory liability and is a tax which is required to be collected by service provider from service recipient and thereafter to be deposited with Government treasury within prescribed time - Essentially, law is imposing tax on service recipient and service provider is merely a collecting agency - Therefore, BSNL was directed to reimburse service tax to assessee [Paras 5 to 7] [In favour of assessee]

Refer:[2014] 45 taxmann.com 217 (Allahabad)

HIGH COURT OF ALLAHABAD

Bhagwati Security Services (Regd.)
v.
Union of India