TMI Blog2014 (6) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... kharan, Member (T) and Anil Choudhary, Member (J) Shri A.R. Krishnan, CA, for the Appellant. Shri Rakesh Goyal, Additional Commissioner (AR), for the Respondent. ORDER There are two appeals directed against Order-in-Original No. 5-6/ST-II/RS/2012, dated 13-8-2012. Cross objections have been filed by the Revenue against the said appeals. As the issue involved in both the appeals are common, they are taken up together for consideration. 2. The appellant TCS e-Serve Ltd., Mumbai, is engaged in providing call centre services, collection and sales services and computerized data processing services to various customers in India and abroad and they are registered with the Service Tax Department under the category of business auxiliary service and business support service . During the course of its business, the appellant received international private leased circuit services from M/s. Verizon Communications Singapore Pte Ltd., Singapore and made payments for the same to the foreign service provider. Two show cause notices were issued to the appellant demanding Service Tax for an amount of Rs. 3,28,93,449/- for the period 1-4-2003 to 31-3-2008 vide notice dated 10- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a licence under the first proviso to sub-section (1) of Section 4 of the Indian Telegraph Act, 1885. In this situation in the instant case since the service provider is located abroad, he is not covered under the definition given in Section 65(109a). Thus the service provided by foreign vendors cannot be taxed under Telecommunication service. (e) Under the Goods and Services Tax (GST) Act of Singapore, Telecommunication Service (which includes any international leased circuit, line or network ) if provided from a place in Singapore to a place outside Singapore is treated as a taxable supply in Singapore but qualifies for zero rating. Hence the same cannot be subject to tax in India. (f) He relies on the decision of Hon ble High Court of Andhra Pradesh in the case of Karvy Consultants Ltd. [2006 (1) S.T.R. 7 (A.P.)] in support of his contention that the transaction is not a taxable transaction. Accordingly he prays for allowing the appeal, with consequential relief. 4. The ld. Additional Commissioner (AR) appearing for the Revenue strongly refutes the appellant s contentions and argues as follows :- (i) The foreign service provider is licensed to provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his section, be taxable service, and such taxable service shall be treated as if the recipient had himself provided the service in India, and accordingly all the provisions of this Chapter shall apply : Provided that where the recipient of the service is an individual and such service received by him is otherwise than for the purpose of use in any business or commerce, the provisions of this sub-section shall not apply : Provided further that where the provider of the service has his business establishment both in that country and elsewhere, the country, where the establishment of the provider of service directly concerned with the provision of service is located, shall be treated as the country from which the service is provided or to be provided. (2) Where a person is carrying on a business through a permanent establishment in India and through another permanent establishment in a country other than India, such permanent establishments shall be treated as separate persons for the purposes of this section. Explanation 1. - A person carrying on a business through a branch or agency in any country shall be treated as having a business establishment in that country. Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly. 5.4 This legal position is evident from the clarification issued by the Board vide letter dated 15-7-2011 cited supra. The relevant portions from the said letter are extracted verbatim below :- Sub : Sections 65(104c), 65(105)(zzzq), 65(111), 66A, Rule 2(1)(d)(iv) - Taxability in respect of International Private Leased Circuit (IPCL) charges and amendment in the definition of Telegraph authority u/s 65(111) of the Finance Act, 1994 - reg. Representations have been received seeking clarification regarding taxability of IPCL charges incurred in foreign currency by BPO/MNCs against receipt of services from the service provider situated outside India/group companies under reverse charge mechanism [Section 66A of the Finance Act, 1994 read with Rule 2(1)(d)(iv) of the Service Tax Rules, 1994]. 2. The matter has been examined. The activities are in the nature of Leased Circuit services presently covered under Telecommunication service. However, for getting classified under Telecommunication service, Section 65(105)(zzzx) of the Finance Act, 1994 provides that the service should be provided by a Telegraph authority. Telecommunication service as defined under Section 65 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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