TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 641
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....ral Networks based algorithms in Knowledge Management and SNMP programming. They obtained Service Tax Registration on 04.06.2008 under the service category of "Information Technology Software Services" and have paid Service Tax on Information Technology Services with effect from 16.05.2008. The period of dispute in the present appeal is 01.04.2005 to 31.04.2008. 2.2 A Show Cause Notice No. 463/2010 dated 01.09.2010 was issued to the Appellant wherein it was proposed to demand (a) an amount of Rs.3,89,081/- as Service Tax under Management Consultant Service for the period 2005-2006 to 2007-2008; and (b) an amount of Rs. 71,849/- as Service Tax under "Commercial Training or Coaching Service for the period 2005-2006 to 2007-2008. 3. The Original Authority confirmed the demand by holding that (a) it cannot be argued that just because Information Technology Service was specifically brought into service tax net under a separate category with effect from 16.05.2008, the same is not taxable prior to that date; (b) since the demand was quantified by levying service tax on Management Consultancy Services after allowing the threshold exemption limit of Rs. 4 lakhs during 2005-06, the appell....
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....tics Private Limited using Java and MySQL technologies. d. software projects were developed by the appellant using Java, .NET technologies and delivered to Unlimited Innovations Private Limited with source code and documentation. Further, the appellant designed and developed software for automating the software life cycle processes of this client. 5.1 The Appellant contended that their core service is Information Technology, viz., "...designing, developing or maintaining of computer software or ...system networking...any other service primarily in relation to operation of computer systems" and it is exempted till May 16th 2008. They quoted the Tribunal's observation in IBM India Pvt Ltd Vs CST [2010 (23) STT 338 Bangalore] wherein "...The Tribunal observed that where a particular service was excluded from the scope of taxable service, it would not be levied to tax under any other category..". 5.2 It was averred that as per the definition of "taxable services" with effect from 10th September 2004, service provided to any person by a consulting engineer in relation to computer software is not a taxable service. Therefore, even if it is assumed that the services rendered by them w....
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....d in providing any service, either directly or indirectly, in connection with the management of any organisation or business in any manner and includes any person who renders any advice, consultancy or technical assistance, in relation to financial management, human resources management, marketing management, production management, logistics management, procurement and management of information technology resources or other similar areas of management. 7.1 The Ld. A.R further submitted that as per Section 65(105)(r) of the Finance Act, 1994, taxable service in relation to management consultancy service is service rendered to any person by a management or business consultant in connection with the management of any organization or business, in any manner. 7.2 The Ld. A.R pointed out that services relating to ERP, which is basically a software driven package, was a taxable service under management consultancy, but was exempted by notification No. 16/2024 which reads as under: - "In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, he....
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....11. The distinction in designing and development of software programmes vis-à-vis management of business and organization has to be understood. Utilization of IT in management or business organization cannot be confused with or equated with the provision of IT services. 12. Emphasis is on advice, consultancy or technical assistance including in the fields of hardware engineering or software engineering for classifying as Consulting Engineering Service. The activity of the Appellant is that they have provided information technology solutions, services for computationally challenging industries such as Radiology solutions in Healthcare, Neural Networks based algorithms in knowledge Management and SNMP programming in telecommunication industries. The impugned order recorded that 'the assessee were providing software related services such as networking services, system and network management, business process improvement initiatives, software development lifecycle improvement initiatives, subscribers services, article tracking module service, systems service, ISO certification initiatives, domain name rental, web space rental, technical operational, leadership services and ....
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....(65)]. * Management, maintenance or repair service - maintenance of software, both packaged and customized and hardware [section 65(64)]. * Banking and other financial services - 'provision and transfer of information and data processing' [section 65(12)]. * Business support service - various outsourced IT and IT enabled services [section 65(105)(zzzq)]. * Business auxiliary service - services provided on behalf of the client such as call centres [section 65(19)]. It is seen from the above list of services that rendering advice, consultancy or technical assistance in relation to hardware engineering is taxable whereas rendering advice, consultancy or technical assistance in relation to software is non-taxable. In the order-in-original it was stated that "the assessee had provided technical assistance in the form of designing software programs using Java etc., for various business activities and for management of organization of their clients. The above circular clarifies the position with regard to the consultancy provided in the present case on computer software related projects, which include design, programming, execution and testing of various software programs for the....