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of <h1>Tribunal rules no Service Tax under reverse charge for Business Auxiliary Services</h1> <h3>Commissioner of Service Tax, New Delhi. Versus M/s Avery Dennison India Pvt. Ltd.</h3> The Tribunal upheld the decision of the Ld. Commissioner, ruling that no Service Tax could be demanded from the respondent under the reverse charge ... Business Auxiliary Service - Reverse Charge Mechanism - Market promotion in India - Export of Services or not? - Held that: - the issue has already been covered by the decision of Microsoft Corporation (I) (P) Ltd. Vs. Commr. of S.T., New Delhi [2014 (10) TMI 200 - CESTAT NEW DELHI (LB)], where Business Auxiliary services provided by the assessee to their members located outside India by marketing their product in India was held to be export of services inasmuch as the service was held to be provided to the foreign located person who was also paying to the assessee on such services in convertible foreign exchange - no Service Tax can be demanded from the respondent under reverse charge mechanism - appeal dismissed - decided against Revenue. Issues: Appeal against dropping the charge of demanding Service Tax under Business Auxiliary Services under reverse charge mechanism.Analysis:1. Issue of Service Tax Demand: The Revenue appealed against the dropping of the charge of demanding Service Tax under Business Auxiliary Services under the reverse charge mechanism. The Revenue contended that the respondent provided services in India, which were used by the service recipient in India, justifying the demand for Service Tax. The matter was adjudicated, and the demand for Service Tax, interest, and penalties were confirmed.2. Export of Service: The respondent argued before the Ld. Commissioner that the services provided were for overseas entities, and the service recipients were located outside India. The Ld. Commissioner held that it constituted an export of service as the services were utilized by entities outside India. This led to the conclusion that Service Tax could not be demanded from the respondent under the reverse charge mechanism.3. Judicial Precedents: The Tribunal referred to a previous decision in the case of Microsoft Corporation (I) (P) Ltd. Vs. Commr. of S.T., New Delhi, where it was observed that services provided by a foreign entity in India for foreign entities abroad constituted export of services. The Tribunal also cited other cases where similar conclusions were reached, emphasizing that services provided to foreign entities, even if facilitated in India, were considered exports of services.4. Decision and Ruling: The Tribunal upheld the Ld. Commissioner's decision, stating that the issue had already been addressed in the Microsoft Corporation case. It was concluded that no Service Tax could be demanded from the respondent under the reverse charge mechanism. Consequently, the appeal filed by the Revenue was dismissed, and the impugned order was upheld.In conclusion, the Tribunal's decision was based on the interpretation of the export of services rules and judicial precedents, leading to the dismissal of the Revenue's appeal against the dropping of the Service Tax demand under Business Auxiliary Services under the reverse charge mechanism.
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