TaxTMI 
TaxTMI 
2013 (12) TMI 792
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.... services such as Business Auxiliary Services, Business Support Service, Information Technology Software Service, Management Consultancy Service, Maintenance or Repair Service, Renting of Immovable Property Service, Transport of Goods by Road Service, etc. They have their branch office in three countries outside India, namely, Japan, Singapore, South Africa, etc. These branch offices are engaged in 'Software Development and Consultancy Service' and these services are provided to overseas customers. Consideration for the services rendered abroad are received by the branches who raised such bills on the customers. Thereafter, deducting the expenditure incurred for rendering the services abroad, excess of income over expenditure of the branche....
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.... along with interest and a penalty of Rs.30,72,75,553/- was imposed on the appellant under Section 78 of the Finance Act, 1994. It is against the order the appellant is before us. 3. The learned counsel for the appellant makes the following submissions: 3.1 The branches are not independent entities and they are part of the appellant's organization. Therefore, if the branches have undertaken service to the overseas customers, it will not be considered as service received by the appellant as there cannot be a service to self. Even if it is held that the appellants have rendered the service, since service has been rendered to the overseas customers, it amounts to export of service. Thirdly, the appellant has received the proceeds in conv....
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....rvice tax on such services rendered abroad in respect of 'Information Technology Software Services' prior to that date would not arise at all. 4. The learned Commissioner (AR) appearing for the Revenue on the other hand submits that as per the provisions of Section 66A of the Finance Act, 1994, even in respect of an Indian company, if they have a fixed establishment abroad, the services received by the Indian entity would be leviable to service tax in India on reverse charge basis and, therefore, the demand of service tax is sustainable in law. Accordingly, he pleads for upholding the impugned order and putting the appellant to terms. 5. We have carefully considered the submissions made by both the sides. As the issue involves interpr....
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....ce tax in India does not appear to be sustainable in law. The appellant has assured that they will be able to lead evidence regarding payment of GST/VAT on the services rendered abroad if opportunity is given to them. 5.3 Thirdly, even if it is assumed that the appellant has received the service from abroad from their branches, since the service have been consumed by the clients abroad, it would amount to export of service under Rule 3 of the Export Service Rules, 2005 in which case also there would not be any service tax liability. In the case of permanent establishment of the appellant situated abroad, the service has been provided by foreign service providers abroad and the service has also been consumed abroad. 5.4 In this view of....