2019 (5) TMI 1146

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....vt. Ltd., are duly registered as service provider under the categories of 'Stock Broker' and "Banking and Other Financial Services". During the impugned period i.e., July 2003 to September 2006, the appellants have rendered services in relation to Initial Public Offer (IPO) to their customers. Service tax department issued two show-cause notices alleging that the appellants are required to pay service tax on brokerage received by them on IPO related service in terms of Section 65(19)(i) of the Finance Act, 1994. Adjudicating authority has dropped these two show-cause notices holding that the appellant is not covered by the definition as shares will become goods only if allotment was made. Commissioner of Service Tax reviewed the proceedings....

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....lating to IPO was not covered under 'Business Auxiliary Services' as defined in Section 65(19) of the Finance Act, 1994. • K. Capital Services Ltd. vs. CCE: 2017 (49) STR 449 (Tri.-Del.) • CCE vs. Ankit Consultancy Ltd.: 2007 (6) STR 101 (Tri.-Del.) • CCE vs. Satguru Management Consultants Pvt. Ltd.: 2007 (7) STR 654 (Tri.-Bang.) • Karvy Consultants Ltd. vs. CCE: 2008 (10) STR 166 (Tri.-Bang.) • Link Intime India Pvt. Ltd. vs. CCE: 2015 (38) STR 705 (Tri.-Mum.) 3.2 Learned counsel further submits that the services in relation to IPO is taxable under the category of "Registrar to an issue" as defined under Sections 65(105)(zzzi), 65(93), 65(59a) and 65(89c) of the Finance Ac....

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....or marketing or selling any goods. It is only an initial / offer and until the rights are issued to the subscribers such as share certificate do not assume the character of goods. Therefore, as rightly held by the lower authority, the services of the appellant to their client are beyond the scope of sub-section (i) 5.1 Coming to the sub-section (ii), service rendered by the appellant to their clients would be chargeable to tax only if it is rendered in relation to promotion or marketing of service rendered by the clients. IPO is only an offer to the prospective buyers and therefore, it cannot be held to be a service by the company offering IPO. Therefore, we find that in either condition, the appellants are not covered by the definition ....