Export of service turns on where the benefit accrues and who receives it, not merely where work is performed.

Services rendered in India to procure orders for a foreign manufacturer were examined for taxability as business auxiliary services, with the circular on export of service treated as relevant to the demand. The decisive factors were the location of the service receiver and where the benefit of the service accrued, rather than the mere place of performance. As the services were rendered for a foreign company and the business promotion benefit accrued outside India, the demand required reconsideration under the circular. The impugned order was set aside and the matter was remanded to the Original Adjudicating Authority for fresh decision.

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Issues: Whether services rendered in India to procure orders for a foreign manufacturer were taxable as business auxiliary services, and whether the circular on export of service required reconsideration of the demand.

Analysis: The service receiver's location was treated as the decisive factor, not merely the place where activities were performed. The circular clarified that services may qualify as export even if part or all of the activity occurs in India, so long as the benefit accrues outside India. As the services were rendered for a foreign company and the benefit of business promotion accrued abroad, the demand required reconsideration in the light of the circular.

Conclusion: The impugned order was set aside and the matter was remanded to the Original Adjudicating Authority for fresh decision applying the circular.

Ratio Decidendi: For export of service, the decisive consideration is where the benefit of the service accrues and the location of the service receiver, rather than the mere place of performance of the activity.

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