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of <h1>Appellate Tribunal rules in favor of appellant, exempts service tax on Business Auxiliary & Training Services</h1> <h3>Bentley Systems (i) Pvt. Ltd. Versus C.S.T., New Delhi</h3> Bentley Systems (i) Pvt. Ltd. Versus C.S.T., New Delhi - TMI Issues:Service tax demand on Business Auxiliary Service and Commercial Training or Coaching Centre Service.Analysis:1. Business Auxiliary Service:The appellant was accused of not paying service tax for services provided to Bentley, Australia, and used in India. The appellant argued that as per a Circular issued by CBEC, the service provided to overseas clients should be considered as export under Rule 3(1)(iii) of the Export of Services Rules, 2005. The Tribunal referred to previous decisions and clarified that service tax is a destination-based consumption tax, and the foreign entities receiving the service are the consumers, not the Indian entities involved in the transactions. The Tribunal held that the service provided by the appellant to promote the market for foreign entities in India amounts to export of service, and thus, no service tax liability exists.2. Commercial Training or Coaching Centre Service:Regarding the demand for service tax on Commercial Training or Coaching Centre Service, the appellant contended that the training provided was incidental to the sale of software and therefore should not be taxed under this category. The Tribunal agreed with the appellant, emphasizing that the primary objective of the appellant is providing IT services, and the training provided was essential for the clients to use the software effectively. Citing a previous case, the Tribunal ruled that training provided to buyers of goods should not be taxed under Commercial Coaching service. Consequently, the Tribunal found no merit in confirming the service tax demand under this category and ruled in favor of the appellant, allowing the appeals.In conclusion, the Tribunal set aside the service tax demands on Business Auxiliary Service and Commercial Training or Coaching Centre Service, based on the arguments presented by the appellant and the legal interpretations provided by the Tribunal in relevant cases. The judgment was pronounced in favor of the appellant on 22.09.2017 by the Appellate Tribunal CESTAT NEW DELHI.
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