Time Limit for disposal of Show Cause Notice

This query is : Resolved 

25 May 2009

Can any of the friends advise whether there is any time limit for the disposal of show cause notice issued by the Service Tax Commissioner? Is any order to be issued by them for dropping the SCN?

A V VishalOnline (Expert)
25 May 2009

Dear Krishnamoorthy,

Why was the Show cause issued and under what section?

S. Krishnamoorthy (Querist)
25 May 2009

Dear Vishal,
The show cause notice was issued demanding service tax on the postage franked by a mailing agency authorised by the Postal Department under the Determination of Value clause of the Notification. Reply was sent in last June 2008 citing the Indian Post Office Act that the "postage" is a "duty" levied by the Postal Department of the Govt of India for transmission of letters by post.
S. Krishnamoorthy

A V VishalOnline (Expert)
25 May 2009

Dear Krishnamoorthy,

“mailing list compilation and mailing” means any service in relation to —

(i) compiling and providing list of name, address and any other information from any source


(ii) sending document, information, goods or any other material in a packet, by whatever name called, by addressing, stuffing, sealing, metering or mailing,for, or on behalf of, the client

Subject to the provisions of section 67, the value of taxable service, where the consideration received is not wholly or partly consisting of money, shall be determined by the service provider in the following manner:–

(a) the value of such taxable service shall be equivalent to the gross amount charged by the service provider to provide similar service to any other person in the ordinary course of trade and the gross amount charged is the sole consideration;

(b) where the value cannot be determined in accordance with clause (a), the service provider shall determine the equivalent money value of such consideration which shall, in no case be less than the cost of provision of such taxable service.

"postage" is a "duty" levied by the Postal Department of the Govt of India for transmission of letters by post, but the service is outsourced to a third party, which is service, hence, the Bill should be in such a way that the stamp value is shown separately and the charges for the services should be shown distinctly and only that portion of the bill for services will attract service tax.

S. Krishnamoorthy (Querist)
26 May 2009

Dear Vishal,
Thank you for your elucidation.
But my main query about the time limit for disposal of SCN still remains unresolved.
I shall be grateful for advice.

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