TaxTMI 
TaxTMI 
2009 (12) TMI 452
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....ideration are the appellant herein is a wholly owned 100 per cent subsidiary of Metro Cash and Carry, Germany ('MCC, Germany' in short) and operates cash and carry distribution centres in India. MCC, Germany is the management entity for all cash and carry activities of Metro group worldwide. MCC, Germany is the proprietor of the trademark, service mark, brand name 'Metro'. MCC, India has entered into a License Agreement dated 4-10-2002 with MCC, Germany wherein MCC, Germany granted rights to use the Trademarks and right to use the proprietary know-how in managing cash and carry business in India. In the said agreement, in consideration of the rights granted to MCC, India the appellants were required to pay an annual royalty equal to an amou....
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....ngth by both sides and perused the records. The issue involved in this case is whether the services rendered by the appellant would fall under the category of 'franchisee service' and whether the said services for which the appellant as a recipient is liable to pay the said service liability. 7. The issue can be decided only on the point whether the appellant being a recipient of the services and situated in India is liable to pay the service tax under the Finance Act, 1994 or not during the relevant period. It is undisputed that the appellant is a recipient of the services of franchiser from MCC, Germany. The findings of the Adjudicating Authority on this point are very relevant, which are as under: "I do not agree with the contentio....
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....ch service is received or to be received by a person who has his place of business, fixed establishment, permanent address or, as the case may be, usual place of residence, in India, such service shall be deemed to be taxable service for the purposes of this clause. By this Explanation services provided by a non-resident outside India to a person residing in India has been declared to be taxable service. Therefore, though the services provided to the members of the Petitioners-Association outside India becomes taxable service, the charge of the tax continues to be on the provider of service as per the scheme of the Act, and because of the Explanation also the Respondents do not get authority of law to levy a service tax in relation to th....
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....levy service tax on a person who is resident in India, but who receives services outside India. In that case till section 66A was enacted a person liable was the one who rendered the services. In other words, it is only after enactment of section 66A that taxable services received from abroad by a person belonging to India are taxed in the hands of the Indian residents. In such cases, the Indian recipient of the taxable services is deemed to be a service provider. Before enactment of section 66A, there was no such provision in the Act and therefore, the respondents had not authority to levy service tax on the members of the Petitioners-association. In the result, therefore, the petition succeeds and is allowed. Respondents are restrai....