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SC stays coercive action by states to recover ST from Tele Cos
New Delhi, Sept 25: In a major relief to all telecom majors, the Supreme Court today in an interim order restrained all states from using coercive methods like attaching assets to recover Sales Tax on the service provided by these firms including Bharat Snachar Nigam Ltd (BSNL).
New Delhi, Sept 25: In a major relief to all telecom
majors, the Supreme Court today in an interim order restrained
all states from using coercive methods like attaching assets
to recover Sales Tax on the service provided by these firms
including Bharat Snachar Nigam Ltd (BSNL).
Referring to a larger bench the question whether the
states were empowered to ask for sales tax on service provided
by these companies when they pay service tax to the Centre, a
bench comprising Justice S Rajendra Babu and Justice A R
Lakshmanan stayed any coercive action to be taken by the state
governments in this regard.
However, the bench said that the states were entitled to
recover the tax from these companies, which included reliance,
Tata, Bharti, Escotel and other telecom service providers, if
the assessment has been completed by the authorities.
All the companies had challenged the recovery of Sales
Tax from them by the state government and the coercive methods
adopted by them on the ground that they were already paying a
substantial service tax to the central government and whether
providing of telecom services amounted to sales.
Bureau Report