Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2014 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (5) TMI 417 - CESTAT NEW DELHIDemand of service tax - Foreign service provider - Held that:- The period of dispute in this case is from 1-7-2003 to 31-12-2004. There is no dispute that the service provider is a U.K. based company not having any office or establishment in India, and it has provided the taxable service, in question, to their client in India, M/s. Goeteze (India) Limited. It is alleged that the appellant during the period of dispute by making available to M/s. Goeteze (India) Limited certain technical information for manufacture of certain product and permitting them to the use of their brand name within certain territory, have provided business franchise service and, therefore, the royalty charged by the appellant from M/s. Goeteze (India) Limited (sic) would attract service tax. During the period of dispute, there was no provision for recovery of service tax from a foreign/offshore provider in case where any taxable service has been provided by a foreign/offshore service provider to a person in India. On the contrary, in terms of the provisions of Rule 2(1)(d)(iv) of Service Tax Rules, 1994 in such situation, it is the service recipient in India who is liable to pay service tax. Subsequently a Notification No. 36/2004-S.T. dated 31-12-2004 effective from 1-1-2005 was issued under Section 68(2) of the Finance Act, 1994 specifically making the service recipient in India liable to pay service tax when service is received from a non-resident foreign service provider not having any office or business establishment in India. Thus, throughout during the period of dispute, there was no provision under which the service tax could be recovered from a foreign/offshore service provider, rather as per the provision of service tax rules it is the service recipient in India who is liable to pay service tax. Moreover, the provision of Finance Act, 1994 cannot be extended beyond the territory of India for demanding service tax from a foreign service provider - Decided against Revenue.
|