Indian Court Allows Company to Shift Service Tax Liability
Sunnyvale, CA - In a milestone verdict, the apex court of India held that an assessee of service tax may
enter into a contract with another party to shift liability. This case involved Rashtriya Ispat Nigam Ltd
and M/S Dewan Chand Ram Saran where the Supreme Court read out the verdict in favour of the former.
Background:
In an agreement, public sector steel manufacturer, Rashtriya Ispat Nigam Ltd involved goods transporter,
M/S Dewan Chand Ram Saran as a contractor for transportation of goods. As per the clause of the
agreement which says that the contractor has to pay all taxes, duties and other liabilities relating to the
discharge of his obligations, the public sector undertaking (PSU) deducted service tax from the
transporter's bill.
Following the deduction, M/S Dewan Chand took the matter to the court. The Bombay high court gave
the verdict in favour of M/S Dewan, and subsequently, the PSU challenged it in the Supreme Court.
Decision:
Overruling the High Court's decision, the Apex Court held that there is no law that can thwart the PSU to
get into an agreement with the transporter that shifts the service tax liability.
Please call/email for more details.
Get the latest press releases and updates on international tax, HR, Finance, compliance and other legal
news at Nair & Co. Industry Alerts.
About Nair & Co.
Nair & Co. provides you with your one touch outsourced finance, compliance, HR and legal department
for your international operations. If you are expanding abroad for the first time, our turnkey solution will
help you do so with minimal risk, stress and cost. We currently support more than 4000+ client
operations in over 50 countries and have core offices in U.K., India, China, U.S., Japan and Singapore.
Nair & Co. was named among the top 100 outsourcing services providers in the world by the International
Association of Outsourcing Professionals (IAOP). Learn more at www.nair-co.com
Know More - eu vat rules, international financial accounting, expat tax advice

---

Document Outline

• 

---