Business support service requires supporting activity, not running the business itself under a distillery takeover agreement.

An arrangement where the appellants took over a distillery unit, paid fixed consideration for use of infrastructure, and manufactured and sold goods on their own account was not business support service under the Finance Act, 1994. The activity was held to be the undertaking of the business itself, with profit and loss borne by the appellants, rather than the provision of supporting managerial, logistical, customer-related, or infrastructural services to another party. The absence of consideration for any supporting service, together with the Revenue's own treatment of the agreement as franchise service, reinforced that business support service was not attracted and the service tax demand was unsustainable.

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Issues: Whether the activity undertaken by the appellants under the agreement amounted to taxable business support service under Section 65(105)(zzzq) of the Finance Act, 1994 read with Section 65(104c) of the Finance Act, 1994.

Analysis: The agreement showed that the appellants took over the distillery unit, paid a fixed consideration for use of infrastructure, and carried on manufacture and sale on their own account. The profit and loss from the activity were borne by the appellants, and there was no evidence that they received consideration for providing any supporting service to the other contracting party. The statutory definition covers only services of a supporting nature to business or commerce, such as managerial, logistical, customer-related, or infrastructural support, and not the actual undertaking of the business itself. The fact that the same agreement had also been treated by the Revenue as attracting franchise service further supported the conclusion that the present arrangement was not one of business support service.

Conclusion: The appellants did not provide business support service and the service tax demand was unsustainable.

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