TaxTMI 
TaxTMI 
2018 (11) TMI 844
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....ance Systems etc. and are also engaged in providing Management, Maintenance and Repair services. Appellants had issued "Foreign Currency Convertible Bonds (FCCBs) in the international capital market through M/s Elara Capital Plc. London. These bonds were meant to raise capital in London for use in Mauritius. To facilitate this transaction, the services of M/s Elara Capital Plc. London were used and they were paid a commission at Brussels. The question which falls for consideration is whether or not the commission paid in Brussels by the appellant whose Registered Office is in Hyderabad when the capital was raised by the company in London for use in Mauritius, is chargeable to service tax under the head "Banking and Financial Services" under....
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.... the Registered Office of the appellant is in India, it does not make them for chargeable to service tax in India, under Section 66A read with Taxation of Service (Provided from Outside India and Received in India) Rules, 2006. He also contended that they were under the bonafide belief that they were not required to obtain the registration certificate as they are not liable to pay service tax based on the expert advice received by them and therefore no penalty is imposable on them. He also submitted that CBEC Circular No. 56/5/2003, dated 25.04.2003 clarified that service tax is a destination based consumption tax and the same view was upheld by Hon'ble Supreme Court in the case of All India Federation of Tax Practitioners vs. Union of Indi....
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.... or commerce, the provisions of this sub-section shall not apply: PROVIDED further that where the provider of the service has his business establishment both in that country and elsewhere, the country, where the establishment of the provider of service directly concerned with the provision of service is located, shall be treated as the country from which the service is provided or to be provided. (2) Where a person is carrying on a business through a permanent establishment in India and through another permanent establishment in a country other than India, such permanent establishments shall be treated as separate persons for the purposes of this section. Explanation 1.- A person carrying on a business through a branch or agency in....
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....n), (o), (s), (t), (u), (w), (x), (y), (z), (zb), (zc), (zi), (zj), (zn), (zo), (zq), (zr), (zt), (zu), (zv), (zw), (zza), (zzc), (zzd), (zzf), (zzg), (zzh), (zzi), (zzl), (zzm), (zzn), (zzo), (zzp), (zzs), (zzt), (zzv), (zzw), (zzx), (zzy), (zzzd), (zzze), (zzzf), and (zzzp) of clause (105) of section 65 of the Act, be such services as are performed in India: Provided that where such taxable service is partly performed in India, it shall be treated as performed in India and the value of such taxable service shall be determined under section 67 of the Act and the rules made thereunder; (iii) specified in clause (105) of section 65 of the Act, but excluding- (a) sub-clauses (zzzo) and (zzzv); (b) those specified in clause (i) of ....
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....ational capital market through M/s Elara Capital Plc. London and paid certain amount as "Transaction Fee" to them for the services rendered by them in relation to the arrangement of the said FCCBs and the money so raised was invested in Mauritius i.e. outside India. Thus, as rightly contended by the Appellants, the service was received and consumed outside India. However, by virtue of Rule 3(iii) of the Taxation of Services, Rules 2000 for leviability of service tax it merely requires that the service recipient should be located in India for use in relation to business or commerce. Though the money raised through FCCBs were invested outside India, it is in relation to business or commerce of the service recipient located in India. Hence I h....