Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2020 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (10) TMI 292 - AT - Service TaxClassification of service - Appellant has appointed M/s. Hewitt Associates for collating and uploading the details/ information, like name, educational qualification, designation, contact number etc, of the employees in the database - Appellant also claims that they are further using the global telecommunication channel set-up by its overseas group entities for making long distance international calls - whether service fall under Business Support Service, Online Information & Database Service (referred as Computer Network Service) and Manpower Recruitment & Supply Agency Services? - time limitation - penalty. Whether the services received by the Appellant from M/s. Hewitt Associates and M/s. Communication Services can be qualified as “Business Support Services”? - HELD THAT:- In view of the insertion w.e.f. 01.05.2011, of words “operational or administrative assistance in any manner”, it goes without saying that the operation is prospective only. It is not disputed that the services are in the nature of helping the routine administration as averred in the SCN - the services availed by the appellants from M/s Hewitt Associates and M/s Communication Services cannot be categorised under “Business Support Service” before 01.05.2011. Whether the networking (telecommunication related) services received by the Appellant from overseas group entities can be classified as Online Information & Database Service (referred as “Computer Network Service”)? - HELD THAT:- The global entity has created a network of computers and provided connectivity between different group entities so that information and data can be exchanged. We find that the learned AR argues that provision of information is also categorised under OIADR. In such a scenario, information flows both ways from the appellants to other global entities and vice-versa. In such a case, the appellants at times become service providers and at times service receivers. It is not coming forth either in the SCN or in the OIO that the amount paid by the appellants to the overseas entity is for the information they received, even if assuming that data retrieval is not mandatory. In view of the submission of the appellants and on perusal of the invoices for the so-called network services, we find that the same are not for provision of online information. Therefore, we are not inclined to accept the contention of the learned AR - the appellants are not exigible to Service Tax on OIADR (Computer Network Service). Whether the Appellant can be said to have received manpower recruitment and supply agency service from overseas group entities? - HELD THAT:- In terms of the employment contract, the appellant is under obligation to pay salary (including other entitlements) to the Seconded Personnel during the period of secondment in foreign exchange in his home country; for administrative convenience, the Appellant remits the salary payable to the Seconded Personnel in his home country in Foreign Exchange through the Seconder Company; the Seconded Personnel, as required under the Income Tax Act, 1961. Extended period of limitation - penalties - revenue neutrality - HELD THAT:- The appellants submit that the issue is revenue neutral as being an STPI unit, the appellants would have been eligible to claim refund of Service Tax paid on input services in terms of Rule 5 of CCR, 2004. The contention has force - As the issue decided on merits, we are not going into further arguments on this point - Having decided the issue in favour of the appellants on merits, we don’t find any reason to discuss the merits or otherwise of imposition of penalties. Appeal allowed - decided in favor of appellant.
|