TaxTMI 
TaxTMI 
2018 (11) TMI 421
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....ve exported the services which are in the nature of 'Business Auxiliary Services' (BAS) being "provision of services on behalf of a client". Therefore, they are eligible for refund of input CENVAT credit under Rule 5 of CENVAT Credit Rules, 2004. 2. It is the case of Revenue that services rendered by the appellant are in the nature of 'Information Technology Support Services' (ITSS) which became chargeable to service tax only in July, 2008 and therefore, their export of services can be considered only with effect from this date and not before. It is also the case of the revenue that some amount on input services claimed by the appellant have no nexus to the output services exported by them and therefore, neither the credit of these services nor refund thereof is eligible. For a period of October, 2007 to December, 2010 the appellant claimed refund of Rs. 2,10,55,046/- and for period January, 2011 to March, 2011 the appellant claimed refund of Rs. 27,93,484/-. Of the total amount of Rs. 2,38,48,530/- the original authority sanctioned Rs. 2,08,10,680/- for the period July 2008 onwards and rejected the amount of Rs. 28,92,918/- on the ground that this amount pertains to the credit of....
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....ts. In case the absence of such input/input service adversely impacts the quality and efficiency of the provision of service exported, it should be considered as eligible input or input service. In the case of BPOs/call centres, the services directly relatable to their export business are renting of premises; right to use software; maintenance and repair of equipment; telecommunication facilities; etc. Further, in the instant example, services like outdoor catering or rent-a-cab for pick-up and dropping of its employees to office would also be eligible for credit on account of the fact that these offices run on 24 x 7 basis and transportation and provision of food to the employees are necessary pre-requisites which the employer has to provide to its employees to ensure that output service is provided efficiently. Similarly, since BPOs/call centres require a large manpower, service tax paid on manpower recruitment agency would also be eligible both for taking the credit and the refund thereof. On the other hand, activities like event management, such as company-sponsored dinners/picnics/tours, flower arrangements, mandap keepers, hydrant sprinkler systems (that is, services which ca....
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....to designing, developing or maintaining of computer software or computerized data processing or system networking or any other service primarily in relation to operation of computer systems. The last words "primarily in relation to operation of computer systems" make the intention abundantly clear. The words "back office processing" used in the clarification dated 28-2-2003 have to be read in conjunction with the other terms used therein viz. data processing, networking, computer facility management. Thus any service of back office processing primarily in relation to operation of computer system will be covered as IT services and not taxable. Payroll-processing, accounts management etc. even by using computer programs cannot be termed as activities primarily in relation to computer systems. The use of computer in these services is secondary and the primary activity is that of business-related work. Thus these services will be taxable as Business Auxiliary Services. This is exactly the position that has been clarified in the circular dated 20-6-2003." 7. Thus it is evident that IT services are only those services which are primarily used in relation to operation of computer system....
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....finition of "Business Auxiliary Service" in the Finance Act, 1994 and particularly to the exclusion of "Information Technology Service" from the scope of "Business Auxiliary Service." Relying on the CBEC Circular No. 62/11/2003-S.T., dated 21-8-2003, the learned Advocate stated that in the light of the above said clarification the services rendered by the appellants would not fall under the exclusion clause in the definition of "Business Auxiliary Service." Reliance was also placed on the decision of this Bench in the case of CCE, Hyderabad-IV v. M/s. Deloitte Tax Service (I) Pvt. Ltd. - 2008 (11) S.T.R. 266 (Tri.-Bang.). Our attention was also invited to the Circular issued by the Department of Revenue vide D.O.F. No. 334/1/2008-TRU, dated 29-2-2008 with specific reference as to the taxability of the IT and IT enabled service. In the said clarification, it has been stated "Number of IT services and IT enabled services (ITeS) are already leviable to service tax under various taxable services. Business Auxiliary Services - services provided on behalf of the clients such as call centres [Section 65(19)]." 7. The fact that the output services are exempted is not relevant for the Exp....