TaxTMI 
TaxTMI 
2018 (8) TMI 102
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....major exporter of agricultural products such as cocoa beans, rice, sesame seeds, cotton etc. The lower Authorities have ordered payment of Service Tax in respect of the following two commissions:- i. Agency Commission:- For undertaking export of rice, the appellant engaged various commission agents in foreign countries, who helped in procurement of export orders for the appellant. Commission was in turn paid by the appellant to such foreign commission agents. Department has demanded Service Tax on such commission paid under the category of 'Business Auxiliary Service' under Section 65(19) of the Finance Act, 1994. Such demands were made under the reverse charge mechanism under Section 66A. ii. Corporate Guarantee ....
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....pecific clarification was issued that 'rice' will enjoy such exemption as an agricultural produce. ii. In this connection he also relied on the case of Kohinoor Foods Ltd. V/s Commissioner 2017(52) STR (Tri.-Del) in which the Tribunal has held that no Service Tax is payable on Agency Commission in connection with export of rice. He submitted that since the present case facts are identical to Kohinoor Foods (case) the Service Tax levied on agency commission may kindly be set aside. iii. With reference to Corporate Guarantee Commission he submitted that such commission was paid to the appellant's parent company in Singapore towards provision of guarantee for obtaining loan by the appellant. He submitted that the payment of s....
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....nt may not be applicable to the facts of the present case. He specifically submitted that in the case of Abdullabhai Abdul Kader, the Tribunal was discussing the provision of L/C but in the present case it has dealt with the case of service provided by the parent company of the appellant to the appellant in relation to procurement of service by the Appellant. This activity is squarely covered under BAS. iv. He also submitted that the arguments on limitation raised by the appellant have been dealt with by the adjudicating authority in para 28.2-28.3. 6. In the rejoinder Ld. Advocate submitted that M/s Olam International Ltd., Singapore did not procure service from the bank for the appellant. He referred to the CBEC Circular dated....
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....ia and such service is received or to be received by a person who has his place of business, fixed establishment, permanent address or, as the case may be, usual place of residence, in India, such service shall be deemed to be taxable service for the purpose of this clause. And whereas, Section 66A of the Finance Act, 1994, w.e.f. 18/04/2006 reads as under:- 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 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 ref....
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.... the parent company has executed corporate bank guarantee in favour of banks in India for facilitation of lending of funds to the appellant and in lieu of the said guarantee the appellant paid 1 per cent of value of guarantee as commission to their parent company at Singapore by way of foreign exchange remittance and their parent company provided them debit notes on quarterly basis. The copies of the said debit notes clearly indicate the transactions with regard to lending facilities in India and therefore through Corporate Guarantee Commission the appellant are chargeable to Service Tax. And the commission paid was taxable under 'Business Auxiliary Service'. Merely because the name of the guarantee has been changed from 'Bank' to 'Corporat....