TaxTMI 
TaxTMI 
2017 (6) TMI 216
X X X X Extracts X X X X
X X X X Extracts X X X X
....contractually mandated broker who, in their case, is M/s I Henning, London. The broker is paid commission in foreign currency by the appellant in accordance with the agreement entered into with the broker. The commission paid to the broker, according to the show cause notice, is liable to tax under section 66A of Finance Act, 1994 in the hands of the appellant as recipient of 'business auxiliary service.' 2. The appellant is also in receipt of 'value added services', covering third-party verification, continuity of supply, intention to offer, consistency of boxes, sight holder extranet services, business sustainability services, consumer confidence, growth service et al. Invoices are raised for these by M/s Diamond Tradin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....6. We have heard both Learned Counsel for appellant and Learned Authorised Representative exhaustively canvas their respective positions on this aspect. 5. For a proper ascertainment of the nature of the service transaction, it is necessary to examine the contracts and terms of agreement that govern the relationship between the provider and the recipient. The contents, nature and manner of fulfilment alone can determine whether a service has been transacted, the place at which it has been transacted and the conformity with the definition of the taxable service. In a peremptory manner, the adjudicating authority has held that '4.2. I The Department has proposed the classification of VAS under 'support services of business and c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....x owing to the location of the recipient. Other submissions made by the appellant have also been summarily dismissed. 8. The statutory foundation for levy of tax on services rendered from outside India is found in section 66A of Finance Act, 1994. It has been operationalised by notifying Taxation, of Services (Provided from Outside India and Received in India) Rules, 2006. Section 66A, shorn off the special provisions relating to inter related establishments that does not concern us in the present dispute, reads thus '66A. Charge of service tax on services received from outside India (1) Where any service specified in clause (105) of section 65 is, - (a) provided or to be provided by a person who has established a busines....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gh a branch or agency in any country shall be treated as having a business establishment in that country. Explanation 2. -Usual place of residence, in relation to a body corporate, means the place where it is incorporated or otherwise legally constituted. A plain construction of the above read with the Rules would leads to the conclusion that the liability to tax, unlike services provided and received within India, devolves on the recipient of the service; unlike services provided and received in India wherein the responsibility shifts from provider to recipient in accordance with the Service Tax Rules, 1994 by specific description of the 'person liable to pay the tax', services provided from abroad are taxable in the hands ....