TaxTMI 
TaxTMI 
2019 (11) TMI 184
X X X X Extracts X X X X
X X X X Extracts X X X X
....communication service provider. As regards the service, there is contract of the appellant with such foreign based telecommunication service provider and against the roaming service provided by the appellant and used by the international roamer in India, the payment is received by the appellant from the foreign based telecommunication service provider therefore, the service recipient is located outside India and the service was provided by the appellant to such service recipient and the payment is also received in convertible foreign exchange. Therefore, such service is export of service and the appellant is entitled for rebate. This issue has been considered in the various judgments of appellant's group companies and also in other judgments. He placed reliance on the following judgments:- (a) Vodafone Essar Cellular Limited vs. CCE - 2013 (31) STR 738 (b) Vodafone Cellular Limited vs. CGST - 2019 (25) GSTL 557 (c) Vodafone Cellular Limited vs. CCE - 2014 (34) STR 890 (d) CST vs. Vodafone Indian Limited - 2015 (37) STR 286 (e) Vodafone Essar Gujarat/ Vodafone West Limited - 2015-TIOL-2100-CESTAT-AHM (f) Verizon Communication India P. Limited vs. Asst. Commissioner....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce provider to provide any service. Since the contract for supply of service is between the appellant and foreign telecom service provider who pays for the services rendered, it is the foreign telecom service provider who is the recipient of the service. From the provisions of law relating to GST in UK and Australia, relied upon by the appellant, this position becomes very clear. Your customer's customer is not your customer. When a service is rendered to a third party at the behest of your customer, the service recipient is your customer and not the third party. For example, when a florist delivers a bouquet on your request to your friend for which you make the payment, as far as the florist is concerned you are the customer and not your friend. 5.2 Export of Service Rules, 2005 defines export in respect of taxable services. For this purpose, the services have been categorized into 3. Category I deals with specified services provided in relation to an immovable property situated in India. Category II deals with specified taxable services where such taxable service is partly performed outside India and states that when it is partly performed outside India, it shall be treated as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n when all the relevant activities take place in India so long as the benefits of these services accrue outside India .......* Thus what emerges from the above circular is that when the appellant rendered the telecom service in the context of international roaming, the benefit accrued to the foreign telecom service provider who is located outside India since the foreign telecom service provider could bill his subscriber for the services rendered. This is the practice followed in India also. When an Indian subscriber to, say, MTNL/BSNL goes abroad and uses the roaming facility, it is the MTNL/BSNL who charges the subscriber for the telecom services including service tax, even though the service is rendered abroad by the foreign telecom service provider as per the agreement with MTNL/BSNL. 5.4 The Paul Merchant's case (supra) relied upon by the appellant dealt with an identical case. The question before the Tribunal in that case was when Agents/Sub-agents in India of Western Union Financial Services, Panama, makes payments to an Indian beneficiary on behalf of the customer of Western Union in foreign country, whether the services rendered by the Indian Agents/Sub-agents should b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iber. Thus, as per the agreement, the appellant agrees to provide service to the foreign telecom company and therefore such foreign telecom company is the service recipient. 5.2 Since the service recipient is located outside India, as per Rule 3(iii) of Export of Services Rules, the said services would amount to export of service for the period prior to 1-7-2012. For the period after 1-7-2012, the Place of Provision of Services Rules, 2012 came to be introduced and as per Rule 3 of such Rules, the location of the service recipient has to be taken into account for deciding as to where the services have been provided. So for the entire period of dispute, since the service recipient is outside India, the same amounts to export of services. 5.3 In drawing such conclusion, we are assisted by the Master Circular dated 23-8-2007 issued by the department. It may be correct that in Circular No. 90/1/2007-S.T., dated 3-1-2007 such services of providing international inbound roaming facility has been clarified by the Board not to be export of service. However, in the subsequent master circular dated 23-8-2007, it is specifically clarified that the said master circular supersedes all earl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nuary, 2017 did not deal with telecommunication services involving transfer of electronic data. Then came the Circular No. 96/7/2007-S.T., dated 23rd August, 2007. This was on the basis of the report of the Committee chaired by Shri T.R. Rustagi, former Commissioner of Customs & Central Excise and Director General (Inspection). On the basis of comments received, the C.B.E. & C. issued the above circular. Paragraph 6 of the said circular reads thus : "6. This circular supersedes all circulars, clarifications and communications, other than Orders issued under Section 37B of the Central Excise Act, 1944 (as made applicable to service tax by Section 83 of the Finance Act, 1994), issued from time to time by the C.B.E. & C., DG (Service Tax) and various field formations on all technical issues including the scope and classification of taxable services, valuation of taxable services, export of services, services received from outside India, scope of exemptions and all other matters on levy of service tax. With the issue of this circular, all earlier clarifications issued on technical issues relating to service tax stand withdrawn." (emphasis supplied) 44. What this circular does is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....The department therefore cannot contend that the services are not export of services for the period from 1-4-2011 to 30-6-2012 and 1-10-2013 to 30-9-2014 which is the disputed periods in these appeals. 6. From the foregoing discussions, we are of the considered opinion that the services are not exigible to service tax being export of service. The impugned orders are set aside and the appeals are allowed with consequential relief, if any, as per law. Vodafone Cellular Limited vs. CCE - 2014 (34) STR 890 5.1 As regards the merits of the case, this Tribunal in appellant's own case, vide order dated 12-3-2013 has held that the activity of providing international roaming facility to inbound travellers in India is a service provided to the foreign telecom service provider who is located outside India and, therefore, transaction constitutes export of services. This decision has been rendered after considering the provisions of Export of Service Rules, 2005 and also based on the Board's Circular No. 111/05/2009-S.T., dated 24-2-2009. Apart from the above, the ratio of the decision in the Paul Merchants Ltd. case has also been applied. Though the Punjab & Haryana High Court has adm....