TaxTMI 
TaxTMI 
2014 (9) TMI 779
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....d Category of Service ST/25395/2013 No. 41/2012 dt. 20.9.2012 16.6.2005 to 30.4.2006 Rs. 16,95,915/- Manpower supply service to Infosys Ltd. April 2005 to March 2006 Rs.33,48,509/- BAS - appellant's service was secondary service to exporter of service Infosys Ltd. 18.4.2006 to 31.3.2007 Rs. 1,75,67,221/- BAS 18.4.2006 to 31.3.2007 Rs. 3,27,49,413/- SSBC - expenses incurred by overseas branches of appellant and reimbursed treated as service rendered by branch to HO. Sec. 66A invoked. 18.4.2006 to 31.3.2007 Rs. 43,982/- GTA - appellant transported goods by air. ST/25167/2013 No. 114/2012 dt. 10.10.2012 April 2007 to September 2010 Rs. 13,18,55,520/- BAS - In respect of service provided by M/s. Vocative Systems Inc. and ePLDT of Philippines outside India to Ingram Micro USA. Sec. 66A invoked. Rs. 24,79,70,954/- SSBC - expenses incurred by overseas branches of appellant and reimbursed treated as service rendered by branch to HO. Sec. 66A invoked. ST/25310/2013 No. 122/2012 dt. 26.10.2012 Oct....
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....raph 4 of the Circular issued by the Board and referred to by the learned counsel is relevant and is reproduced below. 4. Another question raised is about the taxability of secondary services which are used by the primary service provider for the export of services, since the secondary services ultimately gets consumed/merged with the services that are being exported no service tax would be leviable on such secondary services. However in case where the secondary service gets consumed in part or toto for providing service in India, the service tax would be leviable on the secondary service provider. For this purpose both primary and secondary service providers would maintain the records deemed fit by them to identify the secondary services with services that are being exported. 5. The demand has been confirmed on the following grounds : (a) The assessee is providing BPO service whereas M/s. Infosys Technologies Ltd. is into development of software. (b) Assessee provides service to the customers on behalf of the client and there is no connection of the service rendered with that of software development. ....
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....he two subcontractors were not recognized by M/s.Ingram Micro and payments were received for the service rendered by the appellant, the appellant remain responsible for the services provided by them. The learned counsel submitted that the services were rendered abroad, received abroad and appellant was only responsible to ensure that subcontractors perform. He brought to our notice that M/s. Ingram Micro had put a condition in the contract that the subcontractors can deliver the service so long as the appellant held the majority control of those two subcontractor companies. That being the position, the appellant was only responsible for the results and the service was actually rendered and received abroad. In the absence of any proof to show that service has been received in India and thereafter delivered to M/s. Ingram Micro, the taxable event which is receipt of service by the service receiver as per the provisions of Section 66A of Finance Act, 1994 has to be held as not proved to have taken place in this case. In view of the prima facie finding that there is no clear finding forthcoming regarding receipt of service in India and its export or utilization thereafter, appellant ha....
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....ished a business or has a fixed establishment from which the service is provided or to be provided or has his permanent address or usual place of residence, in a country other than India, and (b) received by a person (hereinafter referred to as the recipient) who has his place of business, fixed establishment, permanent address or usual place of residence, in India, such service shall, for the purposes of this section, be taxable service, and such taxable service shall be treated as if the recipient had himself provided the service in India, and accordingly all the provisions of this Chapter shall apply: Provided that where the recipient of the service is an individual and such service received by him is otherwise than for the purpose of use in any business or commerce, the provisions of this sub-section shall not apply: Provided further that where the provider of the service has his business establishment both in that country and elsewhere, the country, where the establishment of the provider of service directly concerned with the provision of service is located, shall be treated as the country from which the service is provided or to be provided. As per Section 66A....
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....be that of income-tax and not service tax. This is challenged as perverse and a grossly misconstrued finding contrary to facts and law. (c) The findings of the Respondent on pleadings relating to limitation (time barred demands) are wholly unjust, without factual appreciation and entirely on specious theories. The non-consideration of material facts, cited judgments and oral pleadings during the hearings conducted by the Respondent annihilate the findings in totality rendering the orders illegal. (d) The arguments of the Appellant on revenue neutrality of the overseas transactions, assuming them to be taxable have been discarded without justification or appreciation. (e) The levy of penalty and interest in each of the orders impugned are without any basis as elaborated in the grounds urged in the respective appeals. (f) Reimbursements to branches in any case cannot be taxed, because the OIO/ SCN admit that the amounts remitted by the Appellant were towards reimbursements and these are in law not taxable / value addable as per the decision of the Delhi High Court in the case of Intercontinental Technocrats and Consultants v. UOI, 2012 (29) STR 9 (Del.). The tax demand on....
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....he service provider is the branch and it cannot be said that overseas branch does not have an establishment in India assuming that it is providing the service classifiable under SSBC. This is because the branch has an establishment in India in the form of their Head Office and abroad as a permanent establishment in that country (assuming that branch is accepted as a permanent establishment which is the case according to Revenue here). When service is provided by a company which has a permanent establishment in India or when the service is provided by a person who has an establishment in India, provision of Section 66A do not get attracted. In this case, if it is assumed that the branch has provided SSBC, service tax demand has to be made on their establishment in India which is nothing but the assessee himself. Going by this logic as well as the submission of the learned counsel, it appears that the claim made by the learned counsel during the argument that for the purpose of levying tax in respect of services provided by a branch to their head office in India this principle cannot be applied and as submitted by the learned counsel it would mean taxing the fund transfer. In such a ....