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2020 (4) TMI 346 - AT - Service TaxBusiness Support Services - It was alleged that the Branch Office of the Appellant in China was a separate entity under the provisions of section 66A (2) of the Act and the services imported by the Appellant under the category of BSS were liable to service tax - SCN alleges that the Appellant received services from the overseas office in China which is for furtherance of business - HELD THAT:- Section 66A (1) refers to ‘service provider’ and ‘service recipient’ as ‘persons’ which would mean different business persons. Section 66A(2) and its Explanation I only fix service tax liability on a recipient of service under a reverse charge mechanism by treating the permanent establishments in India and abroad as separate persons. This only clarifies whether a service is provided and consumed in India or abroad. If the ‘permanent establishment’ is treated as a ‘service provider’ to its own head office in India then it will amount to charging service tax for an activity provided to own self. Therefore, a comprehensive reading of Section 66A of the Act, would indicate that a permanent establishment situated abroad as a ‘separate person’, is only to determine whether the provision of service is in India or out of India. The Commissioner (Appeals) also observed that section 66A is an independent charging section for levy of service tax on services provided or to be provided to a person located in India. This observation of the Commissioner (Appeals) is not correct. The charging section is section 66 of the Act and not section 66A - confirmation of demand under the impugned order, therefore, cannot be sustained. Appeal allowed - decided in favor of appellant.
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