TaxTMI 
TaxTMI 
2023 (4) TMI 828
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....h commission received by the appellant is liable to service tax; (b) As regards the demand of service tax amounting to Rs. 23,67,163/- whether the services of sales promotion and marketing received by the appellant from foreign based agents and commission paid to them is liable to service tax under Reverse Charge basis. 2. Shri Vinay Kansara, learned Counsel appearing on behalf of the appellant, for the first issue submits that the appellant have provided the sales promotion and marketing service in foreign country to the foreign company and the payment was received in foreign exchange therefore, this activity is amounting to export of service in terms of Export of Service Rules. He submits that the commission which falls under ....
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.....1 As regards the demand of service tax amounting to Rs. 23,67,163/- related to sales promotion and marketing service provided to foreign Company and the payment thereof was maded to the Company outside India, the appellant did not pay service tax as they were under impression that the service tax is not required to be paid. However, subsequently they paid service tax of Rs. 14,64,388/- along with interest of Rs. 2,34,461/- upto 30.09.2009. He submits that with effect from 01.10.2009 the service tax was exempted vide Notification No. 18/2009-ST dated 07.07.2009 in respect of service provided by a commission agent located outside India. He submits that Adjudicating Authority has denied the notification on the ground that appellant have not d....
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....recipient of service is located outside India and the payment of commission against said service is received in India, service clearly falls under the category of Export of Service in terms of Rule 3(1) of Export of Service Rules, which is reproduced below:- Export of taxable service. - 3. (1) Export of taxable services shall, in relation to taxable services‚- (i) specified in sub-clauses (d), (m), (p), (q), (v), (zzq), (zzza), (zzzb), (zzzc), (zzzh), (zzzr), (zzzy), (zzzz), (zzzza) & (zzzzm) of clause (105) of section 65 of the Act, be provision of such services as are provided in relation to an immovable property situated outside India; (ii) specified in sub-clauses (a), (f), (h), (i), (j), (l), [* * *], (....
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....on to business or commerce, be provision of such services to a recipient located outside India and when provided otherwise, be provision of such services to a recipient located outside India at the time of provision of such service: Provided that where such recipient has commercial establishment or any office relating thereto, in India, such taxable services provided shall be treated as export of service only when order for provision of such service is made from any of his commercial establishment or office located outside India: Provided further that where the taxable service referred to in sub-clause (zzzzj) of clause (105) of section 65 of the Act is provided to a recipient located outside India, then such taxable servi....
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....2 and 3. Identical issue has been considered by this Tribunal in the case of Yamazaki Mazak India Pvt. Limited (supra) wherein after considering various decisions, the Tribunal has observed as follows:- "54. In view of the above, the difference of opinion on various points is resolved as under : (i) That the Business Auxiliary Services of promotion of market in India for foreign principal made in terms of agreement dated 1-7-2005 amount to Export of Services and the Hon'ble Supreme Court decision in the case of State of Kerala and Others v. The Cochin Coal Company Ltd. - 1961 (12) STC 1 (S.C.) as also Burmah Shell Oil Storage and Distributing Co. of India Ltd. v. Commercial Tax Officers [1960 (11) STC 764] explaining the m....
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....xport of Service hence it is not liable to service tax. Accordingly, the demand on the Export of Service i.e. Business Auxiliary Service is not sustainable hence the same is set-aside. 6. As regards the demand of Rs. 23,67,163/- related to commission paid to the foreign based agent towards the service of sales promotion and marketing received by the appellant, we find that there is no dispute that the receipt of service from the service provider located outside India and the recipient of service is in India, the appellant is liable to pay service tax under reverse charge mechanism in terms of Section 66A of the Finance Act, 1994. The appellant up to 30.09.2009 paid service tax along with interest. As regard the balance service tax amount....