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Introducing the “In Favour Of” filter in Case Laws.
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of <h1>Intermediary service classification for commissions from foreign universities held to be export of service, resulting in demand set aside</h1> Liability to pay service tax for commission earned from foreign universities was examined under the Place of Provision of Services Rules, 2012 and the ... Liablility to pay service tax under intermediary service - foreign universities and getting the commission from the foreign universities - export of services - Place of Provision of Services Rules, 2012 - definition of intermediary under Rule 2(f) - export of service under Rule 3 - extended period of limitation u/s 73(1) of the Finance Act, 1994 - HELD THAT:- Since the issue involved in the present case is stand settled by various decisions, wherein it has been held that the services provided by the appellant is in fact not intermediary service but it amounts to export of service and demand has been set aside in all the cases. Following the ratio of the said decision, we are of the considered view that the impugned order is not sustainable in law and therefore, the same is set aside by allowing the appeals of the appellant. Since, the demand is set aside on merits, we are not inclined to give the findings on other issues. Accordingly, both the appeals are allowed with consequential relief, if any, as per law. Issues: Whether the services rendered by the appellant to foreign educational institutions (referral/commission-based services) qualify as intermediary services under Rule 2(f) of the Place of Provision of Services Rules, 2012 or amount to export of services, and whether the departmental demand (including extended period) and penalties are sustainable.Analysis: The Tribunal examined the definition of 'intermediary' under Rule 2(f) of the POPS Rules, 2012 and considered authoritative decisions of the Tribunal and AARs which hold that a person who promotes the business of a client and provides business auxiliary services (receiving commission for referrals) does not arrange or facilitate the main service between two or more persons and therefore does not fall within the definition of 'intermediary.' The Tribunal noted that services provided to clients located outside India in the nature of business auxiliary/referral services satisfy the conditions of export of services under Rule 3 of the POPS Rules. The Tribunal further observed that reliance on Rule 6A and extended period invocation was not sustainable in the circumstances and that where the demand is unsustainable on merits, penalties and interest cannot be sustained.Conclusion: The services rendered by the appellant are not intermediary services under Rule 2(f) and qualify as export of services; the departmental demand (including that based on the extended period) and penalties are not sustainable. The appeals are allowed and the impugned order is set aside in favour of the appellant.
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