TaxTMI 
TaxTMI 
2018 (1) TMI 1213
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....lysis Service and Management Consultancy Service. On audit by the department, it appeared that for the year 2007-08, the paid-up Share Capital of the appellants had increased by Rs. 30 crores due to allotment of Rs. 15 crores of Equity Shares underlying American Depository Shares [hereinafter referred to as "ADS"] in June, 2007. It emerged that appellants had incurred share issue expenses of Rs. 150.83 crores under the head "Expenditure" in foreign currency, reflected in their Profit & Loss Account. It further emerged that appellants had entered into an Underwriting Agreement with various organisations like M/s. Merril Lynch, M/s Morgan Stanley, M/s. Citi Group Global Markets, M/s. Nomura, Singapore etc., for underwriting the issue of the A....
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....iven in Sections 65 (116) and 65 (117) of the Finance Act, 1994 has the meaning assigned to them in classes (f) and (g) respectively of Rule 2 of the Securities and Exchange Board of India (Underwriters) Rules 1993; (ii) Ld. Advocate took us to the definition of Underwriter to Rule (f) of the SEBI (underwriters) Rules wherein, 'Underwriter' means a person who engages in the business of underwriting of an issue of securities of a body corporate; (iii) The statutory provisions relating to discharge of service tax liability on reverse charge basis is provided in section 66A of the Finance Act, 1994. Section 66A was introduced in the Finance Act, 1994 with effect from 18-04-2006. Proximate to introduction of section 66A, CBEC had issu....
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....le for tax liability. He also submits that the plea of limitation has been fully addressed by the adjudicating authority in para 16 of the impugned order. 5. Heard both sides and we have gone through the facts. 6. Indubitably, the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 will necessarily have to be relied for determining the taxability on reverse charge basis for services received from outside India to a person in India. This aspect has also been clarified by the CBEC in the Circular dated 19.04.2006 relied upon by Ld. advocate. In para 4.2.3 of the Circular, it is clarified that "only services received in India are taxable under these provisions." It further clarifies that section 66A is to....
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....is for different services has been treated differently only in sub-rule (iii) of Rule 3 of the Rules. For Underwriting Services to be taxed at the hands of the person located in India, the services definitely have to be performed fully or partly in India. This is certainly not the case here. In fact, the Underwriting Agreement dated 18-06-2007 makes it clear that the ADS offering is not applicable for sale in India, but only to other select jurisdictions like the United States of America, Canada, Japan etc. We are, therefore of the considered opinion that the impugned services availed of by the appellant not having been performed partly or wholly in India, will not bring forth the requirement of taxability on the appellant on reverse charge....