TaxTMI 
TaxTMI 
2020 (4) TMI 346
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.... as its chief representative by office order dated 28 September 2007 issued by the Senior Manager (Personnel) that contained the conditions of appointment. The chief representative was granted an amount of US$ 5850 per month towards pay, car hire, rent and expenditure on children and medical on actual basis. The responsibilities cast upon the said officer were co-ordination with equipment suppliers liaison with government departments like China Iron & Steel Association etc. and to apprise the Corporate Office about the prevailing government policies with respect to steel. 3. The Appellant was subjected to audit from 27 September 2010 to 29 September 2010 for the period from 2005-06 to 2009-10 by the officers of the department. The department officers observed that services were provided by the representative office at Beijing to support the business of the Appellant and these services were in the nature of "support services of business or commerce" (BSS). The officers further formed an opinion that the Appellant, being a service receiver of the aforesaid services imported from outside, was liable to pay service tax under section 66A of the Finance Act 1994 read with rule 3 of the ....
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....int out that Section 66 of Finance Act, 1994 covers the provisions of charging service tax on the taxable category of services mentioned there under which also includes taxable services classified under Section 65(105)(zzzq) i.e. Business Support Services which are received by the appellants in the instant case. Hence the contention of the appellants is bereft of any merits. ----------- 9.1. On a true and fair construction of the provisions of Section 65(104c), any service provided in relation to business or commerce including those falling within the inclusionary part of the definition constitutes the taxable service enumerated. When the representative office has been setup for coordination with equipment suppliers for modernization/expansion of SAIL plants as well as for gathering market intelligence on steel raw materials and finished products exploring the business opportunities and possible strategic alliances by employing their own staff, the expenditure so incurred is meant for the purpose of garnering business support service only. The representative office in China is therefore a permanent establishment and the facility provided by one constituent to another is nothing....
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....of the Tribunal in M/s Torrent Pharmaceuticals Ltd. v. CST, Ahmedabad 2014-TIOL-2647-CESTAT-AHMD.; (iii) In any case, section 66A is not a charging section. The purpose of section 66A is only to deem the Indian service recipient as a service provider for the purpose of collection of tax. The charging section continues to be section 66. Since there is no charge under section 66 in the show cause notice, tax cannot be levied under section 66A of the Act; (iv) The representative office in Beijing is not a permanent establishment and thus, no tax can be levied under section 66A. The employee located abroad does not have any independent income. The expenses borne by the employee there, are reimbursed from India. This apart, no independent business is carried in Beijing, nor separate books of accounts are maintained by the representative office. The main reason for posting an employee abroad was to have a handy presence there, and the intention of the Appellant was not to carry any independent business there. Therefore, the representative office cannot be said to be a permanent establishment for business in Beijing; (v) The extended period of limitation is not invokable. It has bee....
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.... logistics, customer relationship management services, accounting and processing of transactions, Operational or administrative assistance in any manner, formulation of customer service and pricing policies, infrastructural support services and other transaction processing. Explanation.-For the purposes of this clause, the expression "infrastructural support services" includes providing office along with office utilities, lounge, reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security. ii) Section 65 (105) (zzzq) - "taxable service" means any service provided or to be provided - to any person, by any other person, in relation to support services of business or commerce, in any manner; iii) Section 66A. (1) Where any service specified in clause (105) of section 65 is,- (a) provided or to be provided by a person who has established a business or has a fixed establishment from which the service is provided or to be provided or has his permanent address or usual place of residence, in a country other than India, and (b) received by a person (hereinafter referred to as the recipient) who has his place of....
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....e the goods. All the sale proceeds are directly received by the appellant in India from the overseas customers. Appellant's overseas representative office facilitates the export business of the appellant. Appellant's branch offices/establishment office abroad do not earn any revenue on their own and expenditures incurred by such branch offices are remitted by the appellant from India. The amount remitted to the branch offices also included salaries paid to the employees working in the branch offices abroad. One of the element of demand raised by the Revenue is that branch offices situated abroad are providing services to the appellant and all the foreign remittances made by the appellant to its branch offices are taken to be a considerations for providing services to the appellant." [emphasis supplied] 17. The Tribunal noted the following contentions of the Appellant: "3.4 With respect to demand of service tax under Annexure D-l of the show cause notice, appellant argued that out of total demand in this annexure a demand of service tax of Rs. 7 crores (Approx.) pertains to the remittances to the foreign representative offices/branches towards salary paid to the employees and ca....
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....ssue as to whether service tax could be levied on a reverse charge basis was examined by a Division Bench of the Tribunal in M/s Kusum Healthcare Pvt. Ltd. v/s Commissioner of Central Excise, Jaipur-I 2018-TIOL-549-CESTAT-DEL and the observations are as follows: "5. On the first issue regarding tax liability of the appellant on reverse charge basis under the category of business auxiliary service, we note that the whole Service Tax liability was confirmed on the expenses incurred for setting up and running the branch offices in foreign countries by the appellant. The branch offices were engaged in activities of promoting and liaisoning the business of the appellant in such countries. The lower authority held that such activity will be taxed under BAS as these branches are engaged in promotion and marketing of goods of the appellant. In this connection, we have perused the provisions of Section 66A, more specifically the proviso to the said Section. 6. We find that the Revenue has taken a stand that since as per the proviso, a branch office located outside India shall be treated as a separate business establishment, the services rendered by such establishment should be treated f....