𝐒 𝐉 𝐄𝐗𝐈𝐌 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬

“Indirect Tax I Indirect Tax Litigation I Customs & FTP I Central Licensing I Arbitration I Advisory”

Dated: 31.03.2025

CESTAT Ahmedabad said that double taxation on the same transaction under two tax regimes is not permissible

In a significant ruling on 30th January 2025, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Ahmedabad granted relief to Vistas Designers Private Limited by allowing their refund claim for service tax paid twice—once under the Finance Act, 1994, and again under the Goods and Services Tax (GST) regime.

Case Background:

• Vistas Designers Pvt. Ltd. had paid service tax on advances received during 2016-17, under the provisions of the Finance Act, 1994.
• Post GST implementation on 01.07.2017, the company again discharged tax liability on the same supply under the GST regime.
• As a result, the same transaction was taxed twice, leading the appellant to claim a refund of the earlier service tax payment.

Department’s Stand:

• The department rejected the refund claim, arguing that the tax was correctly paid under the Finance Act, 1994, and thus not refundable.

Appellant’s Argument:

• Cited the decision in M/s Thirumal Facade Solutions vs Commissioner GST and Central Excise, Chennai [2023 (2) TMI 1252], where similar circumstances warranted refund due to double taxation.

CESTAT Observations:

• The Tribunal observed that double taxation on the same transaction under two tax regimes is not permissible.
• Highlighted that the transition from the Service Tax regime to GST provided mechanisms (like TRAN-1 credit) to ensure continuity and prevent undue burden.
• Accepted that refund was justified under the refund provisions applicable through the transition clauses.

Tribunal Verdict:

• Held that either credit or refund must be allowed in such situations to avoid double taxation.
• Directed the department to process the refund claim as per law.
• Appeal was allowed, granting a major win to the appellant.

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Source: CESTAT Ahmedabad

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