TaxTMI 
TaxTMI 
2012 (11) TMI 211
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....ct confirmed by the Commissioner of Service Tax, Mumbai. 2. The brief facts of the case are that the applicant had availed the services of Non=Resident service providers, who did not have offices in India and they had paid certain fees/charges to such non-resident service providers for facilitating issue of Global Depository Shares (GDS) and according to Revenue the service rendered by such non-resident Joi9nt Bank runners and Joint Lead Managers to the applicant appeared to be a taxable service classifiable under the category of Banking and Other Financial Services as Merchant Banking Services and is liable to service tax w.e.f. 16 th July 2001. However, as per Rule 2(1) (d) (iv) of service tax Rules, 1994 read with explanation to Section....
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....er, who were paid underwriter commission for ensuring guaranteed subscription and recipients of commission in this case are essentially underwriters and therefore the service provided by them does not fall under the category of merchant banking service. In the instance case, underwriters also remitted the entire sale proceeds of the shares they have undertaken to subscribe and in the process earned the underwriter commission which they deducted from the gross sales proceeds of the shares and remitted the net proceeds to the appellant. He further contended that as per Clause 14(ii) & (iii) of SEBI (Underwriters) Regulations, 1993 under the heading "Agreement with clients" it is stated that agreement should provide the amount of underwriting ....
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.... Joint Lead Managers (non-resident service providers) like Citigroup, London and Goldman Sachs International U.K., who in turn have offered the sale of same in the open market and after retaining a commission the net proceeds were paid to the applicant and by receiving the net proceeds, the applicant received the service of above non-resident provider and created a levy of service tax on them under reverse charge mechanism by virtue of Section 66A of the Finance Act, 1994. He further submitted that non-residents have provided the services of "issue management" by way of subscribing to the equity shares of the noticee company which were in the form of Global Depository Receipts and selling the same in open market and enabled the applicant to....