Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2017 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (9) TMI 96 - AT - Service TaxReverse charge mechanism - appellant have been receiving the sale proceeds of exports remitted by the foreign purchaser in the bank located in the foreign country and thereafter collected and remitted to the appellant's account through the Indian bank - department was of the view that the foreign bank has been providing taxable service from a non-taxable territory to the appellant which is located in taxable territory for which the appellant as a service recipient is liable to discharge service tax under reverse charge mechanism - Held that: - The foreign bank in which the overseas buyer deposits the sale proceeds is chosen by the foreign buyer and not by the appellant, who is situated in India. By no stretch of imagination can such foreign bank be considered as a service provider for the appellant who in most cases would not even be aware of the identity of such foreign bank. The act of deduction of an amount as charges for transfer of the foreign exchange to the Indian bank from the sale proceeds of the appellant is only a facility for collecting such charges from the Indian bank. This cannot be considered as payment of charges for services by the appellant to the foreign bank. It is actual charges deducted being bank to bank transaction. Similar issue decided in the case of GREENPLY INDUSTRIES LTD. Versus COMMISSIONER OF CENTRAL EXCISE, JAIPUR-I [2015 (12) TMI 80 - CESTAT NEW DELHI], where it was held that the appellant cannot be treated as service recipient and no Service Tax can be charged from them under Section 66A read with Rule 2(l)(2)(iv) of the Service Tax Rules, 1994. The levy of service tax is unsustainable - appeal allowed - decided in favor of appellant.
|