{"id":8169,"date":"2026-03-01T12:45:30","date_gmt":"2026-03-01T07:15:30","guid":{"rendered":"https:\/\/www.centaxonline.com\/blog\/?p=8169"},"modified":"2026-03-01T12:45:30","modified_gmt":"2026-03-01T07:15:30","slug":"no-service-tax-on-free-call-allowance-to-employees-sc","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc","title":{"rendered":"No Service Tax on Free Call Allowance to Employees | SC"},"content":{"rendered":"<pre><strong>Case Details: <a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/excise-service-tax\/101010000000412873\/free-call-allowance-to-employees-is-discount-no-consideration-being-received-service-tax-was-not-leviable-sc\">Commissioner of Central Excise &amp; Central Goods &amp; Service Tax, Gurugram vs. Bharti Airtel Ltd. (2025) 36 Centax 307 (S.C.)<\/a><\/strong><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li><strong>J.B. Pardiwala<\/strong> &amp; <strong>K.V. Viswanathan<\/strong>, JJ.<\/li>\n<li><strong>S\/Shri N. Venkataraman<\/strong>, A.S.G., <strong>V.C. Bharathi, Prashant Singh-II, Purnendu Bajpai, Rajendra Singh Rana<\/strong>, Advocates &amp; <strong>Gurmeet Singh Makker<\/strong>, AOR, for the Petitioner.<\/li>\n<li><strong>S\/Shri Kavin Gulati<\/strong>, Sr. Advocate, <strong>Kumar Visalaksh, Udit Jain<\/strong>, Advocates &amp; <strong>Abhishek Vikas<\/strong>, AOR, for the Respondent.<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>The appellant offered a \u2018Call Free Allowance\u2019 (CFA) scheme to its employees under which employees were granted a waiver from payment of telephone charges for mobile and fixed line connections. The department raised a demand of Service Tax on the amount of CFA, alleging it constituted taxable consideration under telephone services. It was submitted that the CFA was in the nature of a discount or concession provided to employees, that no consideration was received by the company. The matter was accordingly placed before the Supreme Court of India.<\/p>\n<h2><em>Supreme Court Held<\/em><\/h2>\n<p>The Supreme Court held that under Section 35L of the Central Excise Act, 1944 read with Sections 70, 72, and 83 of the Finance Act, 1994, the CFA constituted a discount\/concession to employees and no consideration was received by the assessee; accordingly, Service Tax was not leviable on such amounts. The Court observed that best judgment assessment under Section 72 could not be invoked as returns under Section 70 were regularly filed, and that approximations or assumptions were impermissible in computing Service Tax liability. Consequently, the impugned orders passed by CESTAT were upheld, the demand was set aside, and the appeal was dismissed, confirming that non-monetary employee benefits are outside the scope of Service Tax.<\/p>\n<h2><em>List of Cases Cited<\/em><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=(2025)%2036%20Centax%20306%20(Tri.%20-%20Chan.)&amp;itemType=AP\">Bharti Airtel Ltd. v. Commissioner<\/a> \u2014 (2025) 36 Centax 306 (Tri. &#8211; Chan.) \u2014 Affirmed [Para 2]<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Case Details: Commissioner of Central Excise &amp; Central Goods &amp; Service Tax,&hellip;<\/p>\n","protected":false},"author":19,"featured_media":8189,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49,51,63],"tags":[],"class_list":["post-8169","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>No Service Tax on Free Call Allowance to Employees | SC<\/title>\n<meta name=\"description\" content=\"SC holds free call allowance to employees is a discount without consideration; service tax not leviable on non-monetary employee telecom benefits.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"No Service Tax on Free Call Allowance to Employees | SC\" \/>\n<meta property=\"og:description\" content=\"SC holds free call allowance to employees is a discount without consideration; service tax not leviable on non-monetary employee telecom benefits.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc\" \/>\n<meta property=\"og:site_name\" content=\"Centax-Blogs\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/centaxindia\" \/>\n<meta property=\"article:published_time\" content=\"2026-03-01T07:15:30+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.centaxonline.com\/blog\/wp-content\/uploads\/2026\/02\/2.-No-Service-Tax-on-Free-Call-Allowance-to-Employees.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"920\" \/>\n\t<meta property=\"og:image:height\" content=\"540\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Centax\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Centax\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc\"},\"author\":{\"name\":\"Centax\",\"@id\":\"https:\/\/www.centaxonline.com\/blog\/#\/schema\/person\/f4400180c72e79f30e22a263f2d8fd0a\"},\"headline\":\"No Service Tax on Free Call Allowance to Employees | SC\",\"datePublished\":\"2026-03-01T07:15:30+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc\"},\"wordCount\":285,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.centaxonline.com\/blog\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.centaxonline.com\/blog\/wp-content\/uploads\/2026\/02\/2.-No-Service-Tax-on-Free-Call-Allowance-to-Employees.jpg\",\"articleSection\":[\"Excise &amp; Service Tax\",\"News\",\"Case Chronicles\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc\",\"url\":\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc\",\"name\":\"No Service Tax on Free Call Allowance to Employees | SC\",\"isPartOf\":{\"@id\":\"https:\/\/www.centaxonline.com\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.centaxonline.com\/blog\/wp-content\/uploads\/2026\/02\/2.-No-Service-Tax-on-Free-Call-Allowance-to-Employees.jpg\",\"datePublished\":\"2026-03-01T07:15:30+00:00\",\"description\":\"SC holds free call allowance to employees is a discount without consideration; service tax not leviable on non-monetary employee telecom benefits.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc#primaryimage\",\"url\":\"https:\/\/www.centaxonline.com\/blog\/wp-content\/uploads\/2026\/02\/2.-No-Service-Tax-on-Free-Call-Allowance-to-Employees.jpg\",\"contentUrl\":\"https:\/\/www.centaxonline.com\/blog\/wp-content\/uploads\/2026\/02\/2.-No-Service-Tax-on-Free-Call-Allowance-to-Employees.jpg\",\"width\":920,\"height\":540,\"caption\":\"Service tax on employee free call allowance\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.centaxonline.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"No Service Tax on Free Call Allowance to Employees | SC\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.centaxonline.com\/blog\/#website\",\"url\":\"https:\/\/www.centaxonline.com\/blog\/\",\"name\":\"Centax-Blogs\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\/\/www.centaxonline.com\/blog\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.centaxonline.com\/blog\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.centaxonline.com\/blog\/#organization\",\"name\":\"Centax-Blogs\",\"url\":\"https:\/\/www.centaxonline.com\/blog\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.centaxonline.com\/blog\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.centaxonline.com\/blog\/wp-content\/uploads\/2023\/12\/CNETAX-LOGO-1.webp\",\"contentUrl\":\"https:\/\/www.centaxonline.com\/blog\/wp-content\/uploads\/2023\/12\/CNETAX-LOGO-1.webp\",\"width\":536,\"height\":133,\"caption\":\"Centax-Blogs\"},\"image\":{\"@id\":\"https:\/\/www.centaxonline.com\/blog\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.facebook.com\/centaxindia\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.centaxonline.com\/blog\/#\/schema\/person\/f4400180c72e79f30e22a263f2d8fd0a\",\"name\":\"Centax\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.centaxonline.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/795c4221b76ac6ccc3cbba0cc63dd055?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/795c4221b76ac6ccc3cbba0cc63dd055?s=96&d=mm&r=g\",\"caption\":\"Centax\"},\"url\":\"https:\/\/www.centaxonline.com\/blog\/author\/centax-editorial-team\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"No Service Tax on Free Call Allowance to Employees | SC","description":"SC holds free call allowance to employees is a discount without consideration; service tax not leviable on non-monetary employee telecom benefits.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc","og_locale":"en_US","og_type":"article","og_title":"No Service Tax on Free Call Allowance to Employees | SC","og_description":"SC holds free call allowance to employees is a discount without consideration; service tax not leviable on non-monetary employee telecom benefits.","og_url":"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc","og_site_name":"Centax-Blogs","article_publisher":"https:\/\/www.facebook.com\/centaxindia","article_published_time":"2026-03-01T07:15:30+00:00","og_image":[{"width":920,"height":540,"url":"https:\/\/www.centaxonline.com\/blog\/wp-content\/uploads\/2026\/02\/2.-No-Service-Tax-on-Free-Call-Allowance-to-Employees.jpg","type":"image\/jpeg"}],"author":"Centax","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Centax","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc#article","isPartOf":{"@id":"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc"},"author":{"name":"Centax","@id":"https:\/\/www.centaxonline.com\/blog\/#\/schema\/person\/f4400180c72e79f30e22a263f2d8fd0a"},"headline":"No Service Tax on Free Call Allowance to Employees | SC","datePublished":"2026-03-01T07:15:30+00:00","mainEntityOfPage":{"@id":"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc"},"wordCount":285,"commentCount":0,"publisher":{"@id":"https:\/\/www.centaxonline.com\/blog\/#organization"},"image":{"@id":"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc#primaryimage"},"thumbnailUrl":"https:\/\/www.centaxonline.com\/blog\/wp-content\/uploads\/2026\/02\/2.-No-Service-Tax-on-Free-Call-Allowance-to-Employees.jpg","articleSection":["Excise &amp; Service Tax","News","Case Chronicles"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc","url":"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc","name":"No Service Tax on Free Call Allowance to Employees | SC","isPartOf":{"@id":"https:\/\/www.centaxonline.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc#primaryimage"},"image":{"@id":"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc#primaryimage"},"thumbnailUrl":"https:\/\/www.centaxonline.com\/blog\/wp-content\/uploads\/2026\/02\/2.-No-Service-Tax-on-Free-Call-Allowance-to-Employees.jpg","datePublished":"2026-03-01T07:15:30+00:00","description":"SC holds free call allowance to employees is a discount without consideration; service tax not leviable on non-monetary employee telecom benefits.","breadcrumb":{"@id":"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc#primaryimage","url":"https:\/\/www.centaxonline.com\/blog\/wp-content\/uploads\/2026\/02\/2.-No-Service-Tax-on-Free-Call-Allowance-to-Employees.jpg","contentUrl":"https:\/\/www.centaxonline.com\/blog\/wp-content\/uploads\/2026\/02\/2.-No-Service-Tax-on-Free-Call-Allowance-to-Employees.jpg","width":920,"height":540,"caption":"Service tax on employee free call allowance"},{"@type":"BreadcrumbList","@id":"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-free-call-allowance-to-employees-sc#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.centaxonline.com\/blog\/"},{"@type":"ListItem","position":2,"name":"No Service Tax on Free Call Allowance to Employees | SC"}]},{"@type":"WebSite","@id":"https:\/\/www.centaxonline.com\/blog\/#website","url":"https:\/\/www.centaxonline.com\/blog\/","name":"Centax-Blogs","description":"","publisher":{"@id":"https:\/\/www.centaxonline.com\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.centaxonline.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.centaxonline.com\/blog\/#organization","name":"Centax-Blogs","url":"https:\/\/www.centaxonline.com\/blog\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.centaxonline.com\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/www.centaxonline.com\/blog\/wp-content\/uploads\/2023\/12\/CNETAX-LOGO-1.webp","contentUrl":"https:\/\/www.centaxonline.com\/blog\/wp-content\/uploads\/2023\/12\/CNETAX-LOGO-1.webp","width":536,"height":133,"caption":"Centax-Blogs"},"image":{"@id":"https:\/\/www.centaxonline.com\/blog\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/centaxindia"]},{"@type":"Person","@id":"https:\/\/www.centaxonline.com\/blog\/#\/schema\/person\/f4400180c72e79f30e22a263f2d8fd0a","name":"Centax","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.centaxonline.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/795c4221b76ac6ccc3cbba0cc63dd055?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/795c4221b76ac6ccc3cbba0cc63dd055?s=96&d=mm&r=g","caption":"Centax"},"url":"https:\/\/www.centaxonline.com\/blog\/author\/centax-editorial-team"}]}},"_links":{"self":[{"href":"https:\/\/www.centaxonline.com\/blog\/wp-json\/wp\/v2\/posts\/8169","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.centaxonline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.centaxonline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.centaxonline.com\/blog\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/www.centaxonline.com\/blog\/wp-json\/wp\/v2\/comments?post=8169"}],"version-history":[{"count":1,"href":"https:\/\/www.centaxonline.com\/blog\/wp-json\/wp\/v2\/posts\/8169\/revisions"}],"predecessor-version":[{"id":8174,"href":"https:\/\/www.centaxonline.com\/blog\/wp-json\/wp\/v2\/posts\/8169\/revisions\/8174"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.centaxonline.com\/blog\/wp-json\/wp\/v2\/media\/8189"}],"wp:attachment":[{"href":"https:\/\/www.centaxonline.com\/blog\/wp-json\/wp\/v2\/media?parent=8169"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.centaxonline.com\/blog\/wp-json\/wp\/v2\/categories?post=8169"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.centaxonline.com\/blog\/wp-json\/wp\/v2\/tags?post=8169"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}