Reverse charge liability for cross border reimbursements requires proven receipt of specified services in India; absent that, no tax arises.

Whether cross border reimbursements and payments to overseas branches or foreign vendors attract reverse charge under Section 66A(2) was examined by assessing if a service specified under Section 65(105) was provided from outside India and received in India. The analysis applied the post 2012 place of provision framework, the scope of business support services, and Export of Service Rules to conclude that documentary evidence did not establish receipt or benefit of services in India. Consequently, reverse charge liability was not sustainable on payments made from export receipts or for services consumed abroad, and the challenged proceedings were rightly dropped.

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Issues: Whether reimbursements and fund transfers made by the assessee to its overseas branches or payments to foreign vendors constituted receipt of taxable services in India attracting liability under Section 66A(2) of the Finance Act, 1994 (reverse charge) for the periods in issue.

Analysis: The question required determining if any service specified under Section 65(105) of the Finance Act, 1994 was provided from outside India and received in India such that the provisions of Section 66A(2) would apply. The impugned orders examined documentary evidence including agreements and invoices and the nature of payments (operational reimbursements, payments from export earnings/EEFC, and invoices raised on foreign customers). The Commissioner found no evidence that overseas branches rendered taxable services to the assessee in India or that benefits of services rendered abroad were received in India. Reliance was placed on the amended legal framework concerning place of provision (post 01.07.2012), the scope of 'business support service' under Section 65(104c) of the Finance Act, 1994, and precedent holdings that liability under reverse charge arises only where receipt of service in India by a person situated in India is established. The analysis also considered export of service principles under Rule 3 of the Export of Service Rules, 2005 and consistent appellate authority reasoning that payments made/from export receipts and services consumed abroad do not give rise to service tax liability in India absent evidence of receipt/consumption in India.

Conclusion: The appeals filed by the Revenue are dismissed and the impugned orders dropping proceedings are upheld; no service tax liability is sustained on the reimbursements and payments challenged, in favour of the assessee.

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