Service tax liability can be shifted on service provider by agreement

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HIGH COURT OF DELHI

Decision on: July 4, 2012

OMP 955 of 2011 and IA No.20953 of 2011

RAGHUBIR SARAN CHARITABLE TRUST

Versus

PUMA SPORTS INDIA PVT. LTD.

In the present case, the wording of Clause 7.1 of the lease reflects the intention of the parties that it is the Petitioner who would bear the incidence of all taxes. In light of the decisions in Numaligarh Refinery Ltd. v. Daelim Industrial Co. Ltd. and Rashtriya Ispat Nigam Ltd. v. M/s. Dewan Chand Ram Saran, the view of the learned Arbitrator that in terms of Clause 7.1 of the lease deed, the service tax liability is that of the service provider, i.e. the Petitioner, is a plausible one.