TMI Blog2013 (7) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... lant : Shri Prasad Paranjape, Advocate for Appellant For the Respondent : Shri. V K Agarwal, Addl.Commissioner (AR) Per: P R Chandrasekahran: In all the above appeals and stay applications arising out of order-in-appeal nos. PIII/RS/145-152/2011 dated 24.06.2011 and PIII/RS/51/2012 dated 20.02.2012, a common issue is involved and, therefore, they are taken up together for consideration. 2. The appellant, M/s Vodafone Cellular Essar Ltd., Pune, provided telecom services in India to international in-bound roamers registered with foreign telecom network operators but located in India at the time of providing of the said services and claimed rebate on the ground that the payment was received in convertible foreign exchange from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the tariff of the VPMN operator. HPMN operator is defined as the party who is providing mobile telecommunications services to its subscribers in a geographic area where it holds a licence or has a right to establish and operate a Public Mobile Network. VPMN operator shall mean a party who allows Roaming Subscribers of an HPMN operator to use its Public Mobile Network. Thus as per the agreement, the service is rendered to the foreign telecom service provider who is charged for the services and not to the subscriber of the foreign telecom service provider. The consideration is received in foreign convertible exchange and hence, the transaction is one of export as defined in Export of Service Rules, 2005. Export of Services Rules, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and not the place of performance. In this context, the phrase used outside India is to be interpreted to mean that the benefit of the service should accrue outside India. Thus, for category III services, it is possible that export of service may take place even when all the relevant activities take place in India so long as the benefits of these services accrue outside India. In terms of the above clarification, the services rendered by the appellant qualify as exports . As per the UK VAT Circular vide VATPOSS15100, the place of supply of telecommunication services is where they are used and enjoyed when supplied and when such services are provided by a non-EC provider to a U.K. Customer or a non-business customer in another Mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in India and hence the consumption and enjoyment of the service is in India. CBEC vide Circular 141/10/2011-TRU dated 13.05.2011 while clarifying the circular dated 24.02.2009 issued by the Board has stated that the accrual of benefit should be judged based on where the effective use and enjoyment of service has been obtained. Accordingly, he pleads for upholding the order. 5. We have carefully considered the submissions made by both the sides. As the issue is of a recurring nature and involves interpretation of law, we are taking up the appeals for consideration and disposal after waiving the requirement of any pre-deposit. 5.1 We have perused the agreement entered into between the appellant and the foreign telecom service providers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that when it is partly performed outside India, it shall be treated as performed outside India. Category III deals with services not covered under Category I and II. The telecom services falls under category III. As far as category III services are concerned, eh transaction shall be construed as export when provided in relation to business or commerce to a recipient located outside India and when provided otherwise to a recipient located outside India at the time of provision of such service. The additional conditions required to be satisfied are such services as are provided from India and used outside India; and consideration for the service rendered is received in convertible foreign exchange. As observed earlier, the service is render ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. In this context, the phrase 'used outside India' is to be interpreted to mean that the benefit of the service should accrue outside India. Thus, for Category III services [Rule 3(1)(iii)], it is possible that export of service may take place even when all the relevant activities take place in India so long as the benefits of these services accrue outside India . Thus what emerges from the above circular is that when the appellant rendered the telecom service in the context of international roaming, the benefit accrued to the foreign telecom service provider who is located outside India since the foreign telecom service provider could bill his subscriber for the services rendered. This is the practice followed in India also. When an In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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