Import of service for rendering exempted service in India

[MANOHAR KALBURGI]

Hi Sir/ Madam

Case is like this,

Entity engaged in the intermediary services where it imports certain software license after paying Service Tax at the prescribed rate and once the license is available the same is Sold to the educational institution in India (say IIT, IIM etc).

My doubts goes like this,

1. When Import is done towards sale of exempted service(sale to IIT,IIM) it is not possible to take ITC because sale made to such institutional body is exempted from ST .

2. Now how the service tax paid on import of service can be utilized? or can we take it as ITC if other services are rendering by the Assessee where such service are to taxable services?

3. Whether import of such services are exempted from the ST? because sale is ultimately end up exempted sale in India(i.e IIT)

3. And IIT is to be considered as Governmental Authority since it is set up by an act of Parliament and for the purpose of National importance so it is exempted from ST from point of view.

Please look into this case and provide me your valuable opinion

Thanks in advance

AI Summary

Entity Can Use Service Tax Paid on Software Imports as Input Tax Credit for Other Taxable Services Under Relevant Rules. An entity involved in intermediary services imports software licenses, paying Service Tax, and sells these to educational institutions in India, such as IITs and IIMs, which are exempt from Service Tax. The entity queries whether it can utilize the Service Tax paid on imports as Input Tax Credit (ITC) for other taxable services. The response confirms that ITC can be used for taxable services without needing a direct correlation, and that IITs are considered governmental authorities, thus exempt from Service Tax. Relevant notifications and rulings were cited to support these points.