Incidental or auxiliary services exemption covers local agency functions linked to computer education promotion and fee collection.

Services performed by an authorised local agency for computer education promotion were treated as incidental or auxiliary to the client's specified activity, because the agency only coordinated training centres, ensured prescribed courses, arranged infrastructure, collected fees and remitted them to the client. On that basis, the services fell within the exemption notification, and the denial of exemption was unsustainable. The article also notes that the issue had already been settled in earlier Tribunal decisions on identical facts, applying the principle that exemption clauses are construed strictly to determine coverage and, once covered, liberally in favour of the claimant.

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Issues: Whether the services rendered by the appellant as an authorised local agency for computer education promotion were covered by the exemption for services incidental or auxiliary to the specified activities under the relevant service tax notifications.

Analysis: The appellant's functions were confined to coordinating with authorised training centres, ensuring prescribed courses, arranging infrastructure, collecting fees and remitting the same to the client. These activities were held to be incidental or auxiliary to the client's service and therefore within the scope of the exemption notification. The issue had already been settled in earlier Tribunal decisions on identical facts, and the dispute was treated as no longer res integra. Applying the settled approach that exemption clauses are first construed strictly to see whether the claimant falls within them and, once covered, are construed liberally, the services were found eligible for exemption.

Conclusion: The appellant was held entitled to the exemption and the denial of exemption was unsustainable.

Ratio Decidendi: Services performed as an authorised local agency that are incidental or auxiliary to the promotion and delivery of the client's specified activity fall within the exemption for incidental or auxiliary services under the relevant notification.

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