Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2017 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (3) TMI 793 - AT - Service TaxLiability of tax - Commission Income - commission received from affiliates in foreign country - whether covered under Business Auxiliary Services or not? - Held that: - the services rendered by the respondent were in relation to procuring orders and promoting products, of foreign suppliers. Admittedly, the said services fall under the category of “BAS”. However, it is a well settled legal position that the nature of service rendered by the respondent is consumed by the foreign supplier of goods. The benefit is directly accruing to such foreign entities - there is no tax liability on the respondent in respect of services, which are rendered to the suppliers of the goods from foreign countries - The activities of export of service is not to be taxed. Reversal of CENVAT credit - credit availed on common input services, attributable to their trading activities - Rule 6(3) of Cenvat Credit Rules, 2004 - Held that: - input service credit available is only when output service is taxable. If there is no output service, no credit can be taken - Since trading, during the material time, is not even considered as an “exempted service”, it necessarily follows that no credit on input services used for trading activities can be availed at all. If there are common input services, it necessarily follows that, in the absence of separate accounts, the services attributable to taxable output service can only be held eligible to the respondent - the respondent is liable to reverse the credit attributable to the trading activities. Appeal disposed off - decided partly in favor of Revenue.
|