TaxTMI 
TaxTMI 
2016 (3) TMI 355
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.... which are as under; a. Marketing and promotion services: Applicant proposes to engage in promotion and marketing of GoDaddy US services in India. This would essentially include increasing the awareness of services provided by GoDaddy US and establishment of the brand GoDaddy in India. Towards this, the applicant proposes to provide the following services: i. Direct Marketing: Applicant shall advise GoDaddy US regarding various aspects of the market situation prevailing in India from time to time. Applicant would also advise GoDaddy US regarding upcoming events, festivals, holidays in India and accordingly the suitable timing for rolling our campaigns or advertisements in India (either in various social media or by way of dispatch of personal emails to GoDaddy US existing customers in India). The content of advertisement would be prepared by the marketing team of GoDaddy US itself. Also, such advertisement would be directly placed on social media by GoDaddy US. The necessary advice in this regard and said information would be provided from the applicant to GoDaddy US. ii. Branding Activities: Applicant shall assist GoDaddy US in developing its brand in In....
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....or the services rendered by the said agency, b. Supervision of quality of third party customer care center services: GoDaddy US intends to provide its customers in India a superior experience and quality services. GoDaddy US also intends to provide the customers with an avenue where the customers have round the clock access to technical support and assistance in relation to the services of GoDaddy US. Towards this, GoDaddy US will directly appoint a third party call centre in India to provide such support and assistance to customers in India. Further, to ensure that the call centre provides the best customer support service and that the employees of the call centre understand the relevant technical aspects, GoDaddy US shall require the applicant to provide oversight of the quality of the services of the call centre. Applicant will have no role to play in selection or appointment of the call centre in India by GoDaddy US. Applicant shall provide oversight of the quality of services rendered by the call centre and prepare a report, if desired by GoDaddy US, regarding the nature of complaints received by the call centre from customers in India so that GoDaddy could b....
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....ncies and call centers. Further, the applicant will not be engaged in arranging or facilitating provision of services by GoDaddy US to customers in India. Furthermore, the applicant will not secure orders from customers in India or arrange or facilitate the provision of any service by any third party service provider to GoDaddy US. The only service to be performed by the applicant is provided to GoDaddy US on a principal-to principal and arm's length basis. 3. GoDaddy US, through its website 'GoDaddy.com' is engaged in the business of providing name registration, web hosting, designing and other services. The nature of services provided by GoDaddy US is outlined below: a. Domain name registration and transfer services: GoDaddy US registers and transfers both generic top level domains, including the prominent domains such as .com, .net, .org, and .info, as well as country code top level domains including, .us,.ca,.mx,.fr,.it,.de and.es. Any user desirous of obtaining any particular domain can access a website of GoDaddy US and place a request for the same. Upon availability, GoDaddy US registers the desired domain name for the customer in his name. The custom....
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....services in relation to marketing, branding, offline marketing, oversight of quality of third party customer care center and payment processing on a principal to principal basis in terms of the draft Service Agreement; that these services would be provided with the sole intention of promoting the brand 'GoDaddy' in India. Applicant submits that the draft Service Agreement between applicant and GoDaddy US clearly shows that applicant would perform the service as a marketing and promotion support service provider in order to get GoDaddy US brand established in Indian market; that entire gamut of services proposed to be provided by the applicant are intended to be towards the common objective of supporting the business of GoDaddy US in India; that principal objective of the applicant will be to advance the business of GoDaddy US in India and establish its brand presence in the territory of India; that towards this the applicant proposes to undertake marketing and other allied services such as oversight of customer care centers operated in India by a third party orarranging for payment processing services to facilitate easy and secure payments by the customers of GoDaddy US; th....
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....g on board and transport by air is a bundle offered by a majority of airlines. iii. The nature of the various services in a bundle of services will also help in determining whether the services are bundled in the ordinary course of business. If the nature of services is such that one of the services is the main service and the other services combined with such service are in the nature of incidentally or ancillary services which help in better enjoyment of a main service. For example service of stay in a hotel is often combined with a service or laundering of 3-4 items of clothing free of cost per day. Such service is an ancillary service to the provision of hotel accommodation and the resultant package would be treated as services naturally bundled in the ordinary course of business. Other illustrative indicators, not determinative but indicative of bundling of services in ordinary course of business are- - There is a single price or the customer pays the same amount, no matter how much of the package they actually receive or use. - The elements are normally advertised as a package. - The different elements are not available separately.....
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.... service tax. Explanation - For the purposes of sub-section (3), the expression "bundled service" means a bundle of provision of various services wherein an element of provision of one service is combined with an element or elements of provision of any other service or services.)" Rule 9 of Place of Provision of Services Rules, 2012; The place of provision of following services shall be the location of the service provider- (a) Services provided by a banking company, or a financial institution, or a non-banking financial company, to account holders (b) Online information and database access or retrieval services; (c) Intermediary services; (d) Service consisting of hiring of all means of transport other than,- (i) Aircrafts, and (ii) Vessels except yachts, Up-to a period of one month 9. The contention of Revenue is that the services proposed to be provided by the applicant are "intermediary services" as mentioned under Rule 9 (c) of POPS. 'Intermediary' is defined under Rule 2 (f) of POPS as under; (f) "intermediary" means a broker, an agent or any other person, by whatever....
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....vided by the applicant, would support the business interests of GoDaddy US in India. 12. It has been submitted by the applicant that services to be provided by the applicant are not peculiar only in applicant's case but are provided by various Indian entities to their overseas customers in India as a single package. Further, supporting the business of GoDaddy US in India is the main service and processing payments and oversight of services of third party Call Centers are ancillary and incidental to the provision of main service i.e., business support service. Further, applicant would provide said services as a package and the payment for the entire package would be a consolidated lump sum payment. Applicant submits that in view of all these indicators, service provided by them to GoDaddy US is a bundle of services, which is bundled in normal course of business. This point has not been controverted by the Revenue. We agree with the submissions of the applicant that proposed services are a bundle of services, bundled in normal course of business and not intermediary service. 13. In view of above, we rule as under; In the facts and circumstances, the various support servi....
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....ant is providing to GoDaddy US services viz.; direct marketing and promotion services, supervision of quality of third party customer care center services and payment processing services, as per draft Service Agreement between the applicant and GoDaddy US. There is no contract between the applicant and the customers of GoDaddy US based in India. GoDaddy US have used said services provided by the applicant as per the draft Service Agreement. Further, applicant would charge a fee equal to the operating costs incurred by the applicant plus a mark-up of 13% on such costs, which would be received by the applicant from GoDaddy US in US Dollars. The benefit of services provided by applicant accrues to GoDaddy US outside India. In view of above, judgments relied upon are of no avail to the Revenue, as services provided by the applicant are to be consumed in US and not in India. Further, the judgment in case of Microsoft Corporation (India) Pvt. Ltd relied upon by the Revenue is an interim order regarding pre-deposit of the amount ordered by the Tribunal. Further, Hon'ble High Court observed that both sides have arguable case. In the case before us, Rule 3 ibid is applicable as the reci....
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....of the Finance Act, 1994. As all the ingredients enlisted under Rule 6 A ibid are satisfied, said service will qualify as export of taxable service. In view of above, we rule as under; In the facts and circumstances, the services to be provided by the applicant to GoDaddy US would fall to be classified under Rule 3 of the Place of Provision of Services Rules, 2012 qualify as export of taxable services in terms of Rule 6A of the Service Tax Rules, 1994 (inserted vide Notification No. 36/2012-S.T. dated 20.6.2012) and therefore remain non-taxable for purpose of payment of service tax under the Finance Act. Question No.4: Whether in the facts and circumstances of the case, by providing the support services being business support to GoDaddy US, the Applicant is providing any service to the customers of GoDaddy US in India? 18. Applicant inter-alia submits that he would be hired by GoDaddy US to provide business support services and other incidental or allied services to GoDaddy US only and not to the customers of GoDaddy US in India. Under no circumstance, the applicant will provide any support to the customers of GoDaddy US in India; that after sale support including usage of....