TaxTMI 
TaxTMI 
2012 (7) TMI 667
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.... ever since that date they have been paying service tax on activities which they classified under the entry in the Finance Act 1994 for Management Consultancy Service. However, they did not consider that Compliance Services would fall within the definition of Management Consultancy Service and they were not paying service tax on such activities. 3. Revenue was of the view that the appellant had short paid service tax for the period 2001-2002 to 2004-2005 being tax payable on consideration received for such Compliance Services provided. Based on such reasoning, a Show Cause Notice was issued to the appellant on 20.10.2006 demanding service tax to the tune of Rs. 3,53,05,405/- on such services provided during the said period. 4. Section 65(65) of Finance Act 1994 defined Management Consultant as under: "Management Consultant means any person who is engaged in providing any services, either directly or indirectly, in connection with the management of any organisation in any manner and includes any person who renders any advice, consultancy or technical assistance, relating to conceptualizing, devising, development, modification, rectification or up-gradation of any working sy....
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....ill constitute management consultancy in the affirmative, it also deals with the issue whether Compliance Service will come within the scope of such services. We reproduce para 9 of this Circular as under: "9. Taking into account ail the above points, the Board has taken a view that merger, acquisition and other form of restructuring of business organisation have emerged as key element in the modern management and as the term 'management' covers the various functions and the multifarious activities required for efficient and effective functioning of an organisation, any advisory services rendered in merger and acquisition transaction are also includible under the taxable service rendered by 'management consultant'. However, those agencies providing services as per the requirement of any statute or regulation such as Takeover Regulations of SEBI and, if their role is limited to the compliance of such act or regulations and not governed by any contractual relationship with the advisee company, then such services will not be covered under scope of 'management consultant'." 8. The Counsel also relies on the decision of the Tribunal in CCE v. Future Polyesters Ltd. [Final Order No....
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....s with the income tax authorities. Tax Withholding: Assistant in preparation of Tax Deducted at Source ('TDS') returns and filing the same with the income tax authorities. Domestic Taxation: Assistant in preparation of corporate tax returns other documents such as registrations, IEC code, replies to notices, etc. with the VAT authorities/Service tax authorities/customs authorities/excise authorities/Director General of Foreign Trade ('DGFT'), attending hearings before the authorities etc; International Tax Services: Assistance and representing clients before the tax authorities; Foreign Investment Promotion Board ('FIPB') Related: Assistance in preparation and filing of various applications, following up with the authorities and obtaining approvals; Assistance in preparation and filing of various applications and other documents with the various authorities such as the Registrar of Companies, etc. follow up with the relevant authorities and obtaining approvals, if any; Reserve Bank of India ('RBI') Related: Assistance in preparation of application for opening and closure of liaison/branch office and various other documents, filing of documents and follow up with t....
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....the case of Futura Polyesters Ltd. (supra) quoted above is clearly to the effect that most of the impugned activities could not fall under the definition of Management Consultancy Service. We are of the view that though compliance with laws is part of the responsibilities of management such responsibility per se cannot bring it into the ambit of the words "in connection with the management of any organisation" used in section 65(105)(r) and section 65 (65) of Finance Act, 1994 to tax such services. In this matter we see merit in the clarification given by CBEC in para 9 of its circular dated 27-06-2001. The decision of the Apex Court in the case of Parle Exports (P) Ltd. (supra) gives the rule that a taxing entry should be understood in the same way in which these are understood in the ordinary parlance. According to CBEC the ordinary meaning of management will not cover Compliance Services. According to the adjudicating authority ordinary meaning of management covers Compliance Services. We concur with the view of CBEC and reject the view of the adjudicating authority, since in our view every responsibility of management cannot be considered as management function. For example the....