TaxTMI 
TaxTMI 
2025 (11) TMI 508
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....ules, 2012, therefore, the services provided by the appellant were not considered as 'Export of Services'. 5.3 In the instant case the appellant had contended that human intervention was required to encode the incoming data into the data base and outgoing from the data base and the appellant had also submitted that they had to travel out of the country several times in order to provide service, hence, the location of service provider was also out of taxable territory. 5.4 I find from the copy of contract for reprogram the electronic gate of the livestock sector in the Ministry of Agriculture executed between M/s. Amad Technical Consultancies & Laboratories, Represented by Eng. Saud Aljabreen, C.R. 1010287638 Riyadh Somatra Street and the appellant. I find that the contract was for technical support of the electronic portal of the animal resources sector for three months and the appellant was required to implement an application of the smart systems working on basis of the IOS and android system for electronic portal of the animal resources sector and the appellant was required to encode the incoming data into the data base and outgoing from the data base. ....
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....s amount, reflected in the ITR. Appellant vide their reply dated 'nil' received vide e-mail submitted that they are engaged in provision of export of services to Software implementation/consultancy as per Service Tax Rules and the same is exempted from service tax. 2.3 The explanation given by the appellant was not accepted and it was observed that appellant short paid service tax as detailed in table below:- (Amt. in Rs.) Financial Year Sale of Services Shown in ITR Service tax rate inclusive of all cess Service Tax Payable Short paid Service Tax inclusive of all cess 2016-17 69,13,306 *15% 10,36,996 10,36,996 2.4 Invoking the charge of suppression, show cause notice dated 18.10.2021 was issued to the appellant, asking them to show cause as to why- "(i) The Service Tax amounting to Rs. 10,36,996/- (Rupees Ten Lac Thirty Six Thousand Nine Hundred & Ninety Six only) including Education Cess, Secondary & Higher Education Cess should not be demanded and recovered from them under proviso to Section 73(1) of the Finance Act, 1994 read with Section 142 & 174 of CGST Act, 2017. (ii) The due interest on the amount of Service Tax ment....
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.... (v) I also impose a penalty of Rs.10,000/- (Rupees Ten Thousand only) under Section 77(1)(d) of the Finance Act, 1994 read with Section 142 & 174 of CGST Act, 2017 for not depositing the due Service Tax electronically. (vi) I also impose a penalty of Rs. 10,000/- (Rupees Ten Thousand only) under Section 77(2) of the Finance Act, 1994 read with Section 142 & 174 of CGST Act, 2017 for non filing of ST-3 returns for the F.Y. 2016-17." 2.6 Aggrieved appellant have filed appeal before Commissioner (Appeals), who by the impugned order modified the Order-in-Original to the extent of reducing the demand to Rs.5,87,299/- and penalties under Section 78 accordingly. 2.7 Aggrieved appellant have filed this appeal. 3.1 I have heard Shri Dharmendra Srivastava learned Counsel appearing for the appellant and Shri Santosh Kumar learned Authorised Representative appearing for the revenue. 4.1 I have considered the impugned orders along with the submissions made in appeal and during the course of argument. 4.2 Appellant had filed appeal before Commissioner (Appeals) on the following grounds as referred in para-3.1 of the impugned order:- "i. That the app....
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....al automated and involving minimal human intervention' though in present case human intervention was required to encode the incoming data into the data base and outgoing from the data base. viii. Because as all the conditions under Rule 6(A) of Service Tax Rules, 1994 are already satisfied, hence the services were treated to be export of services by the appellant and proof thereof is already submitted alongwith e-FIRC for receipts in convertible foreign exchange." 4.3 At para-vi reproduced above, reference was made to the contract with M/s Amad Technical Consultants & Laboratories whereby following has been stated- "The second party i.e. the party will encode the data incoming to the data base and outgoing from the data base" By making reference of the above Commissioner (Appeals) has concluded that these are the services covered under the category of OIDAR. However, from the above statement, it is clear that appellant was received data from their client, processing it and returning the same to their client. They never owned such data, he was only providing the en-coding facilities in respect of data owned by the client. 4.4 The basic question that ne....
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....ot be treated as "online information and database access or-retrieval services":- i) Sale or purchase of goods, articles etc over the internet; ii) Telecommunication services provided over the internet, including fax, telephony, audio conferencing, and video-conferencing; iii) A service which is rendered over the internet, such as an architectural drawing, or-management consultancy through e-mail; iv) Repair of software, or of hardware, through the internet, from a remote location; v) Internet backbone services and internet access services. 4.6 By Circular No. 202/12/2016 dated 09.11.2016 following was clarified: 12. Do OIDAR services include all services mediated by information technology over internet or electronic network? Using the internet, or some electronic means of communication, just to communicate or facilitate outcome of service does not always mean that a business is providing OIDAR services 13. What services would NOT be considered as OIDAR services? Indicative list of non-OIDAR services i. Supplies of goods, where the order and processing are done electronically ii. Supplies of physical books, ....
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....ata and is not disseminating the same through the network appearing for public for uses against the cost, these the verification report created or transmitted through by the appellant to its clients/entities namely Dataflow Dubai by using network of computers. 4.9 In case of Philips Electronics India Ltd. [2019 (21) GSTL 450 (Tri.-Mad)] following has been held: "5.2 The department has sought to bring these IT infrastructure services within the fold of OIDAR. We find that the term "Online Information and Database Access or Retrieval" has been defined under Section 65(75) of the Act to mean providing Data or Information Retrieval or otherwise to any person in electronic form through a computer network. Further under Section 65(105)(zh) of the Act, taxable service means any service provided or to be provided to a client by any person in relation to Online Information and Database Access or Retrieval or both, in electronic form through computer network in any manner. 5.3 The main take away from the definitions is that services provided should facilitate not only online information but also Database Access or Retrieval. From the facts on record, it appears to reason....
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....obolive 3D Pvt. Ltd. [2023 (76) G.S.T.L. 433 (Bom.)] observed as follows: "23. The next question would be as to whether the impugned order is correct when it categories the service offered by the petitioner to be online information and database access or retrieval services (OIDAR) within the meaning of Section 2(17) of the IGST Act. On a perusal of said definition, such services have been defined to mean services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention and impossible to ensure in the absence of information technology and includes electronic services such as advertising on the internet; providing cloud services; provision of e-books, movie, music, software and other intangibles through telecommunication networks or internet; providing data or information, retrievable or otherwise, to any person in electronic form through computer network; online supplies of digital content (movies, television shows, music and the like); digital data storage and online gaming. We would wonder as to how such specialized service as ....