{"id":7908,"date":"2026-02-08T14:27:01","date_gmt":"2026-02-08T08:57:01","guid":{"rendered":"https:\/\/www.centaxonline.com\/blog\/?p=7908"},"modified":"2026-02-08T14:27:01","modified_gmt":"2026-02-08T08:57:01","slug":"under-full-rcm-service-tax-not-payable-by-provider-cestat","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/under-full-rcm-service-tax-not-payable-by-provider-cestat","title":{"rendered":"Under Full RCM Service Tax Not Payable by Provider | CESTAT"},"content":{"rendered":"<pre><strong>Case Details: <a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/excise-service-tax\/101010000000415934\/in-fy1617-manpower-security-service-tax-payment-was-under-full-rcm-provider-not-liable-cestat\">Protectwell Security Services vs. Commissioner of Central Goods &amp; Services Tax, Noida (2026) 39 Centax 22 (Tri.-All)<\/a><\/strong><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li><strong>Shri Sanjiv Srivastava<\/strong>, Member (T)<\/li>\n<li><strong>Shri Manish Raj<\/strong>, Authorised Representative, for the Appellant.<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>The appellant was a registered service provider engaged in the supply of manpower and provision of security services, against whom proceedings were initiated on the basis that the receipts disclosed in service tax returns were lower than the figures reflected in income records, leading the Department of Revenue to allege short payment of service tax and to confirm a demand with interest and penalties. In appeal, it was contended that the entire consideration related to manpower supply and security services on which service tax liability was governed by the reverse charge mechanism (RCM), and that, in terms of Notification No. 30\/2012-S.T., dated 20-06-2012, as amended by Notification No. 7\/2015-S.T., dated 01-03-2015, the obligation to discharge service tax was placed wholly on the service recipients. It was further submitted that for services covered by full reverse charge, no liability could be fastened on the service provider. However, the Commissioner (Appeals) decided ex parte, stating that the documents were incomplete and that there were no agreements or invoices to verify recipients&#8217; RCM payments. The matter was accordingly placed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).<\/p>\n<h2><em>CESTAT Held<\/em><\/h2>\n<p>The CESTAT held that manpower supply and security services were, during the relevant time, covered under the RCM in terms of Notification No. 30\/2012(supra), and that the liability to pay service tax in respect of such services rested entirely on the service recipient. The Tribunal held that the statutory framework under section 68 of the Finance Act, 1994, made a clear and categorical distinction between the liability of the service provider and that of the service recipient, and that the two could not be interchanged. It was held that where one hundred per cent of the tax was payable under RCM, the service provider was not required to discharge service tax even in a situation where the service recipient had failed to do so. On this reasoning, the Tribunal held that the demand confirmed on the appellant was unsustainable in law and could not be enforced against the service provider.<\/p>\n<h2><em>List of Cases Cited<\/em><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2005%20(188)%20E.L.T.%20149%20(S.C.)&amp;itemType=AP\">Anand Nishikawa Co. Ltd. v. Commissioner<\/a> \u2014 2005 (188) E.L.T. 149 (S.C.) \u2014 Relied on [Para 4.10]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2014%20(36)%20S.T.R.%2037%20(Cal.)&amp;itemType=AP\">Infinity Infotech Parks Ltd. v. UOI<\/a> \u2014 2014 (36) S.T.R. 37 (Cal.) \u2014 Relied on [Para 4.10]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2007%20(211)%20E.L.T.%20193%20(S.C.)&amp;itemType=AP\">Commissioner v. Chennai Petroleum Corporation Ltd.<\/a> \u2014 2007 (211) E.L.T. 193 (S.C.) \u2014 Relied on [Para 4.10]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=(2025)%2032%20Centax%20226%20(S.C.)&amp;itemType=AP\">Stemcyte India Therapeutics Pvt. Ltd. v. Commissioner<\/a> \u2014 (2025) 32 Centax 226 (S.C.) = 2025 (394) E.L.T. 3 (S.C.) \u2014 Relied on [Para 4.11]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2013%20(288)%20E.L.T.%20161%20(S.C.)&amp;itemType=AP\">Uniworth Textiles Ltd. v. Commissioner<\/a> \u2014 2013 (288) E.L.T. 161 (S.C.) \u2014 Relied on [Para 4.9]<\/li>\n<\/ul>\n<h2><em>List of Notifications Cited<\/em><\/h2>\n<ul>\n<li>Notification No. 30\/2012-S.T. dated 20-6-2012 [Paras 4.2, 4.4, 4.5, 4.6]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=Notification%20No.%207%2F2015-S.T.&amp;itemType=AP\">Notification No. 7\/2015-S.T.<\/a> dated 1-3-2015 [Paras 4.2, 4.4, 4.5]<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Case Details: Protectwell Security Services vs. Commissioner of Central Goods &amp; Services&hellip;<\/p>\n","protected":false},"author":19,"featured_media":7910,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49,51,63],"tags":[],"class_list":["post-7908","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-excise-service-tax","category-news-excise-service-tax","category-est-case-chronicles"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Under Full RCM Service Tax Not Payable by Provider | CESTAT<\/title>\n<meta name=\"description\" content=\"CESTAT held that for FY 2016\u201317 manpower supply and security services were under full reverse charge, making service recipients liable, not providers.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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