TaxTMI 
TaxTMI 
2024 (12) TMI 1617
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....RDER PER: D.M. MISRA These appeals are filed by the Revenue against Order-in-Original No. 64-65/2018 dated 05.11.2018 passed by the Commissioner of Central Tax, Bangalore. The Cross Objections filed by the respondent are also taken up along with the appeals for hearing and disposal. 2. Briefly stated the facts of the case are that during the course of audit of the records of the respondent by the internal audit of the department, it was noticed that the respondent was reflecting foreign currency expenditure for the period October 2007 to March 2013 in their balance sheet as branch expenditure, which had been incurred towards expenses by the overseas branch officers. It further revealed that the expenditure incurred comprises o....
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....de India i.e., USA and Germany. Hence, the levy under Section 66A of the Finance Act, 1994 is attracted. Further, the learned Commissioner has erred in observing that the foreign exchange payments made by the respondent to their branch offices are in the nature of reimbursable expenditure, which is also not correct in view of the facts of the case. The lumpsum amount had been transferred to the overseas branch under various heads in the books of accounts as stated in the show-cause notices. The purpose for which the payments were made have been indicated, therefore, the same are not reimbursable expenditure and reliance placed on the judgment of the Hon'ble Supreme Court in the case of Union of India v. Intercontinental Consultants & Techno....
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....ovider or service receiver as the activity of Bangalore office and that of Branch office is one and the same. The respondent have been reimbursing the expenses in convertible foreign exchange and there is no correlation between the salary given to the employees to the income earned by the main office. 5. Heard both sides and perused the records. 6. The issue involved in the present appeals for consideration is whether the expenses incurred by the branch office of the respondent at USA and Germany in rendering certain services for and on behalf of respondent's main office in Bangalore would attract service tax under Section 66A of the Finance Act, 1994. Revenue's contention is that the branch office of the respondent at USA and Germany....
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....or e.g. if a branch of an Indian bank is situated abroad, Section 66A does not envisage treating the foreign branch as a separate entity so far as the internal transactions are concerned, if the head office reimburses to the foreign branch expenses incurred by them abroad. It cannot be said to be a consideration for any services rendered. The services rendered abroad has been received by the branch office located abroad. Merely because the expenditure incurred for receipt of the services were reimbursed to the foreign branch, the transaction does not amount to import of services. The reason is that the service provider, service recipient and place of performance of service are all located abroad. The purpose of Section 66A is not to tax ser....