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New Delhi, June 16 (PTI) A tax tribunal has ruled that non-payment of service tax to the government on a "bonafide belief" that it (the service) is exempted under the law would not invite penalty against the service provider. The Customs Excise & Service Tax Appellate Tribunal (CESTAT), Ahmedabad, gave its decision on the plea of a security service provider, which had challenged the order of the Commissioner of Central Excise imposing penalty for non-payment of service tax on services rendered by it to government organisations. The tribunal accepted the contention that the service provider was of bonafide belief that services provided to government organisations were exempted from service tax. "I find myself in agreement with the submissions that there could be a bonafide belief on their part as regards payment of tax on the services rendered to government organisations," judicial member Archana Wadhwa, who was the sole member to decide the issue, said in the order. The tribunal noted that no profit was earned by the service provider, as they did not charge service tax on the services rendered to government agencies. The counsel for Docsuns Services Pvt Ltd had contended that had they known that service tax was to be paid, they would have collected it from their customers and deposited it with the revenue authorities. The company had rendered services to the Municipal Corporation of Rajkot and Gujarat Industrial Development Corporation, among others. Service tax was not paid on the services provided to these organisations. AHA RKS ARV.
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