Appellate Tribunal grants waiver for service tax on support services for foreign customers

The Appellate Tribunal CESTAT, CHENNAI, granted the application for waiver of pre-deposit of service tax for Business Auxiliary Services provided to foreign customers. The Tribunal considered the applicants' services as support services of business or commerce, similar to a previous case, and waived the pre-deposit amount of Rs. 93,60,126/-, along with interest and penalty. The recovery was stayed during the appeal process, acknowledging that the services fell under the statute only from 1-5-2006.

---

---

Issues: Application for waiver of pre-deposit of service tax for Business Auxiliary Services (BAS) provided to foreign customers.

The judgment by the Appellate Tribunal CESTAT, CHENNAI, involved the consideration of an application for waiver of pre-deposit of service tax amounting to Rs. 93,60,126/- along with interest and penalty of Rs. 94 lakhs. The demand arose from the provision of Business Auxiliary Services (BAS) to foreign customers. The Tribunal noted that the assessees had already paid an admitted liability of Rs. 2,55,615/- for the period subsequent to the introduction of Section 66A in the Finance Act, 1994. The Tribunal found that the assessees had made a strong prima facie case for waiver based on a previous decision in the case of Fifth Avenue and Fifth Avenue Wind Mills Pvt. Ltd. v. Commissioner of Service Tax, Chennai, where similar services were considered support services of business or commerce and not covered under BAS. As the services provided by the present applicants were deemed somewhat identical to those in the cited case, the Tribunal decided to waive the pre-deposit amount, accepting that the applicants provided support services of business or commerce which came under the statute only from 1-5-2006, staying the recovery during the appeal process. The order was pronounced in open court by Jyoti Balasundaram, Vice-President of the Tribunal.

---