Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

M/s N.R. Management Consultants India (P) Ltd Versus CST New Delhi And Vice-Versa

2017 (12) TMI 451 - CESTAT NEW DELHI

Liability of service tax - export of service or not? - the service is received by the foreign based client and consideration is received by the appellant-assesses inconvertible foreign exchange - Held that: - It is clear that though the data information and other analysis is collected and done by the appellant-assesses in India, the same is in terms of an agreement with a foreign based company. The foreign based client paid consideration inconvertible foreign exchange. The nature of service bein .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s to how the expenditure incurred in foreign exchange can be considered as a payment towards specific category of taxable service and thereafter can be subjected to tax at the hands of the appellant on reverse charge basis. We find considerable force in appellant-assesse’s plea with reference to presumptive nature of the demand for service tax attributable to expenditure in foreign currency - Admittedly, the reimbursable expenditure incurred by the appellant is as per pre-arrangement and reimbur .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r: B. Ravichandran These appeals are against the common impugned order dated 28.02.2014 of Commissioner of Service Tax, New Delhi. Both Revenue as well as the assesses preferred appeal. The appellant-assesses are engaged in providing management or business consultant service liable to tax under Section 65 (105) (r) of the Finance Act, 1994 read with Section 65 (65). Proceedings were initiated against the appellant-assesses by way of issue of SCN dated 17.10.2012. The demand is for recovery of se .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

93,73,670/-, which is attributable towards reimbursable expenditure incurred by appellant-assesses while providing service. He also ordered recovery of ₹ 2,710/- towards irregular Cenvat credit availed by the appellant-assesses. Penalties were imposed under Sections 77 & 78 of Finance Act, 1994. 2. The ld Counsel appearing for the appellant submitted that a demand of ₹ 6,76,382/- has been confirmed on the ground that the appellant-assesses provided management or business consult .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

at the Revenue could not clearly establish that the services received in lieu of such expenditure in foreign exchange are, in fact, covered by tax entry of management or business consultant service. The demand is made based on the details available in appellants accounts regarding expenditure in foreign exchange. Such presumptive demand cannot be legally sustained. 4. Without prejudice to the same, the ld Counsel submitted that tax liability, if any, paid by the appellant-assesses on such servic .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nsel for the appellant-assesses submitted that the original authority correctly applied the ratio of the decision of Hon ble Delhi High Court in M/s Intercontinental Consultants & Technocrats (P) Ltd, 2012 TIOL 966 HC Delhi-ST to hold that the taxable value cannot include reimbursable expenditure incurred on behalf of client. 7. The ld AR contested the grounds of appeal by the appellant-assesse. He submitted that though the appellants provided service as per agreement with M/s Nippon Koei Co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nvolved in providing management or business consultant service and have also received such services in furtherance of their business. 9. We have heard both sides and perused appeal record. On the first issue, we note that the appellant-assesses entered into an agreement and in pursuance of such agreement, they have to collect various details regarding policies, plans and priorities relating to Gujarat forestry sector. They are also required to collect documents, data and information relating to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ature of service being such, the same is for consumption and benefit of the foreign client. Service tax being consumption/destination based tax, we find that the services rendered by the appellant-assesses are, in fact, to be considered as export. We are in agreement with the appellant assesses that the ratio laid-down by the Tribunal in: i) M/s Gap International Sourcing (India) Pvt Ltd-2014-TIOL-465-CESTAT-DEL ii) M/s Microsoft Corporation (I) (P) Ltd-2014 (36) STR 766 (Tri.Del.) iii) M/s Paul .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt with the foreign based companies to whom the appellant paid foreign exchange. We perused the impugned order in this regard. Para 34 of the impugned order examined the defence of the appellant with reference to lack of clarity in the demand. It is clear that there is no categorical finding as to how the expenditure incurred in foreign exchange can be considered as a payment towards specific category of taxable service and thereafter can be subjected to tax at the hands of the appellant on reve .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cts and circumstances of the present case. Admittedly, the concept of reverse charge was a new legal principle for service tax. The same was subjected to numerous litigations and interpretation. The legal position got firmed up only after the decision of Hon ble Bombay High Court in Indian National Shipping Owners Association-2009 (13) STR 235 Bombay, which was affirmed by Hon ble Supreme Court-SC 2010 (17) STR J57. The legal position was confirmed and clarified by Board vide instruction dated 2 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version