Service tax stay on online access and business support demands granted after prima facie and interpretive issues were found.

Waiver of pre-deposit and stay of further proceedings were granted in a service tax dispute involving online information or database access or retrieval service, business support service, and internet advertising space. The demand for online information or database access or retrieval service raised a strong prima facie case because the recipient of foreign services is treated as if it had provided the service in India under reverse charge, and that fiction was considered relevant when examining the exemption order. The business support service issue was treated as evenly balanced at the interlocutory stage, with final consideration required on the application of noscitur a sociis. The internet advertising levy was not contested at this stage.

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Issues: Whether waiver of pre-deposit and stay of further proceedings should be granted in respect of the service tax demand arising from online information or database access or retrieval service, business support service, and sale of space or time for advertisement on internet.

Analysis: The demand relating to online information or database access or retrieval service was found to raise a strong prima facie case because the recipient of foreign services is treated as if it had provided the service in India for the purposes of reverse charge under Section 66A of the Finance Act, 1994, and that statutory fiction was considered applicable while examining the benefit of the exemption order. The business support service demand was treated as evenly balanced at the interlocutory stage, since the applicability of noscitur a sociis to the definition required final consideration. The levy on sale of space or time for advertisement on internet was not contested at this stage.

Conclusion: Waiver of pre-deposit and stay of further proceedings were granted, subject to a monetary deposit within the time fixed by the Tribunal.

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