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2023 (12) TMI 48 - AT - Service TaxClassification of service - business auxiliary service or Telecommunication services? - providing international roaming facilities to the subscribers of the appellant travelling to foreign countries - HELD THAT:- The payment of roaming charges was made by the Appellant to FTOs for providing connectivity services to their subscribers when they are abroad. We find that the services are appropriately classifiable as ‘Telecommunication Service’. During the relevant period, only telecommunication services provided by a 'Telegraph Authority' to a person was taxable. In the instant case, FTOs located abroad providing the connectivity services would not fall within the ambit of 'Telegraphy Authority' as defined under Section 65(111) of the Finance Act, 1994 read with Section 3(6) of the India Telegraph Act, 1885. Accordingly, it is observed that the charges paid for the services rendered by the FTOs cannot be taxed under head “Business Auxiliary Service” on the Appellant. The issue is no longer res-integra as the issue has been settled by the decision of the CESTAT, New Delhi in case of one of the Appellant's group Companies, viz. VODAFONE ESSAR MOBILE VERSUS C.S.T., DELHI [2017 (9) TMI 359 - CESTAT NEW DELHI]. The Tribunal in the aforesaid ruling was considering whether roaming services provided by foreign telecom company can be taxable under the head “business auxiliary service” wherein the Tribunal has observed There is no dispute that the services provided by the foreign telecom Company is squarely covered by the tax entry ‘telecommunication service’. The facts and circumstances of the case cited above are similar to the case on hand and the ratio is applicable for the present case on appeal. In light of the aforesaid decisions, we hold that the demand confirmed in the impugned order under the category of ‘Business Auxiliary Service’ on the Appellant is not sustainable. Since the demand is not sustainable consequently, demand of interest and penalty is also not sustainable. The impugned order set aside - appeal allowed.
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