TaxTMI 
TaxTMI 
2018 (12) TMI 1753
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....to be rendering of 'business auxiliary service' chargeable to tax, under section 65(105)(zb) of Finance Act, 1994, and upon the commission of Rs. 3,10,51,208/- received in 2008-09 and 2009-10, the tax liability of Rs. 33,61,311/- was sought to be recovered in proceedings initiated against them. It was the contention of the respondent herein that, the commission, having been received from outside India and in convertible foreign exchange, was for rendering service to entities outside the country the exemption in Export of Service Rules, 2005 would apply. The original authority upheld the demand under section 73, along with interest thereon under section 75, of Finance Act, 1994 besides imposing penalty under section 78. The first appellate a....
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....o doubt that an activity for which consideration is received by an entity from outside India in convertible foreign exchange is nothing but export and, hence, not liable to tax. However, it is the contention of Revenue that after the grouping of the various taxable services according to location of the immovable property, location of performance and location of recipient, rule 3(2) of Export of Service Rules, 2005 thereof mandates not only receipts of consideration in foreign exchange but also a two-fold condition of the service having been provided from India and used outside India. In addition to the reliance placed on the decision in re Life Care Medical Systems, the relevance of the second leg of the condition supra has been cited as su....
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....erwhelming majority of decisions are in favour of non-taxability and the only decision relied upon in the grounds of appeal lack binding precedent. The disputation of these decisions in appeals by Revenue does not disturb the precedential value till disposal by the Hon'ble Supreme Court. Furthermore, the final disposal of the dispute in re Life Care Medical Systems and re Microsoft Corpn (I) (P) Ltd are not in favour of the stand adopted by the Revenue in the present instance. Hence on the first point of determination framed by the Revenue authority, we find no reason to sustain the appeal. 6. Turning to the interpretation of rule 3(2) of Export of Service Rules, 2005, the issue stands settled by the decision of the Hon'ble High Court of B....
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.... is in that sense that the Tribunal holds that the benefit of the services accrued to the foreign clients outside India. This is termed as 'export of service'. In these circumstances, the Tribunal takes a view that if services were rendered to such foreign clients located abroad, then, the act can be termed as 'export of service'. Such an act does not invite a Service Tax liability. The Tribunal relied upon the circulars issued and prior thereto the view taken by it in the case of KSH International Pvt. Ltd. v. Commissioner and B.A. Research India Ltd. The case of the present respondent was said to be covered by orders in these two cases. To our mind, once the Hon'ble Supreme Court has taken the view that Service Tax is a value added tax wh....