CESTAT held that services provided by the appellant to its...

CESTAT held that services provided by the appellant to its overseas group entities qualified as export of services under the Export of Service Rules, 2005, since consideration was received in convertible foreign exchange and the benefit accrued to foreign entities. The appellant was not an intermediary. Operating fees relatable to salaries of hotel owners' employees were treated as pure agent expenses and excluded from taxable value; employer-employee services were not taxable under s.65B(44). Reimbursement of expenses and cost-sharing with associated enterprises did not constitute taxable services. Consequently, the service tax demands, interest and penalties were set aside and the appeal was allowed.

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