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Issues: Whether the services rendered as search engine optimisation and allied IT-enabled services to overseas clients were liable to service tax as Online Information and Database Access or Retrieval services, or qualified as export of services under the service tax regime.
Analysis: The appellant produced invoices and bank records showing receipt of consideration in foreign exchange from overseas clients. The record did not establish that the services were in the nature of OIDAR, since such services require online access to information or database retrieval and are not made out merely because the service is delivered digitally. The nature of the work, as described, was search engine optimisation and related support functions, which is closer to IT-enabled or business support activity than OIDAR. In the absence of material showing that the statutory conditions for denying export treatment were satisfied, the demand could not be sustained.
Conclusion: The services were not classifiable as OIDAR and were treated as export of services. The service tax demand, interest, penalties, and late fee could not survive.
Final Conclusion: The impugned order was set aside and the appeal was allowed.
Ratio Decidendi: Search engine optimisation and similar IT-enabled services provided to foreign clients do not become OIDAR services merely because they are rendered online; where the recipient is abroad and consideration is received in foreign exchange, such services may qualify as export of services if the statutory conditions are met.
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