2019 (1) TMI 1179 – CESTAT CHENNAI – TMI – Reverse Charge Mechanism – commission received by the appellant from the appellant’s service recipients located outside India – place of provision rules – export of services in terms of 6A of the Service Tax Rules, 1994 – whether the provision of service which was exempted from service tax by virtue of being an export service could become taxable after 09.10.2014? – Held that:- It is not the case of the Revenue that the appellant arranges or facilitates other services as well, in addition to the above, to its ‘Principals’ nor is the case of the Revenue that the appellant had suppressed the provision of any other service. The Revenue has also nowhere disputed the above service rendered by the appellant, ie., procuring/obtaining orders for its Principals located outside the taxable territory, for which the commission is paid by its Principals as also the fact of that obtaining orders from the Indian customers is the main and the only service re
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ted:- 23-1-2019 – Shri P. Dinesha, Member (Judicial) Shri P.C. Anand, Consultant, for the Appellant Shri L. Nandakumar, AC (AR) for the Respondent ORDER A Show Cause Notice (SCN) dated 31.05.2017 was issued covering the periods October, 2014 to March, 2016 alleging interalia that the commission received by the appellant from the appellant s service recipients located outside India, was liable to service tax as per the amended Rule 2 (f) of the Places of Provisions of Services Rules, 2012 (POPS) w.e.f. 01.10.2014. After considering the explanation filed by the assessee, the adjudicating authority vide Order-in-Original No. 6/2018 dated 05.02.2018 confirmed the proposed demand and consequently appropriated the payments made towards the service tax and also interest. In the order, the adjudicating authority has negated the pleadings of the appellant that their services came under the purview of export of services in terms of 6A of the Service Tax Rules, 1994 (STR). Not having met with suc
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on to the facilitation of a service since, there is or in between. Right from the beginning, facilitating the provision of service by identifying the Indian customers and obtaining orders is the only and main service of the appellants. The extract of education guide published by CBEC made it further clear that a commission agent who buys and sells goods is not an intermediary. Rule 3 of the POPS makes it clear that the place of provision of service shall be the location of the service recipient whereas Rule 9 ibid prescribes the place of provision of specified services in the nature of intermediary services is that of the location of the service provider, etc. He also relied on the following case laws in support of his contentions:- 1. ABS India Ltd. Vs. CST, Bangalore 2009 (13) STR 65 (Tri.-Bang.) 2. AERO Products Vs. CST, Bangalore 2009 (15) STR 225 (Tri.-Bang.) 3. Godaddy India Web Services Pvt. Ltd. 2016 (46) STR 806 (AAR) 4. Universal Services India Pvt. Ltd. 2016 (42) STR 585 (AA
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as well, in addition to the above, to its Principals nor is the case of the Revenue that the appellant had suppressed the provision of any other service. The Revenue has also nowhere disputed the above service rendered by the appellant, ie., procuring/obtaining orders for its Principals located outside the taxable territory, for which the commission is paid by its Principals as also the fact of that obtaining orders from the Indian customers is the main and the only service rendered by the appellant. I find the above service is a taxable service but for the fact that it is an export of service and the same stood exempted for all the preceding years. This fact is also vouched by the granting of refund by the Revenue for an earlier period, vide OIO No. 93/2013-(R) dated 07.08.2013. 4.3 Rule 3 of POPS Rules which is relied on by the appellant, reads as under:- Place of provision generally:- The place of provision of a service shall be the location of the recipient of service: Provided tha
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Therefore, if the service of the appellant herein is held to be that of intermediary services, then Rule 9 will automatically apply. If not, Rule 3 will apply. Rule 2 (f) excludes the services of intermediary if the person whose main service is arranging or facilitating a provision of service, which also stands automatically excluded from the purview of Rule 9 and thus would fall under Rule 3. 5. The facts of the case as analysed elsewhere in this order, make it clear that obtaining/procuring order for its foreign Principals is the main service rendered by the appellant and consequently, rigors Rule 9 vis-à-vis Rule 2 (f) are not applicable. In view of the above, I am of the considered opinion that Rule 3 of POPS Rules would only apply and therefore the appellant cannot be fastened with tax liability. For the above reasons, demand as well as the impugned order are not sustainable and consequently, the same are set aside and the appeal stands allowed with consequential benefits
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