2017 (5) TMI 1145 - AT - Service Tax

Business Exhibition Service - service received from foreign service provider - reverse charge mechanism - Held that - section 66A is a deeming provision which says that such service shall be taxable service and such taxable service shall be treated so as if the recipient has himself provided the service in India and accordingly, the provisions of FA, 1994 for levy of service tax will be applicable to such facts - the appellant did not provide/receive any service within India. In other words, the subject services have been fully performed outside India only. There is not even part performance or part receipt of service within India - there cannot be any liability of Service Tax for the subject services which have entirely been performed outside India - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against service tax demand for Business Exhibition Service provided by a foreign service provider, whether service tax is applicable for services performed outside India.

Analysis:
The appellant, Plastichemix Industries, appealed against the demand of service tax for Business Exhibition Service received from a foreign service provider during 2006-2011. The appellant argued that since the service was rendered outside India, it should not be taxable unless performed wholly or partly in India. The appellant relied on Section 66A of the Finance Act, 1994, which states that service tax is applicable if the service is received in India. The Taxation of Services Rules, 2006, specifies that services performed in India are taxable, and if partly performed in India, they are deemed to be performed in India. The appellant contended that there was no performance or receipt of service within India. The Tribunal referenced a similar case where it was held that services entirely performed outside India are not taxable. Therefore, the appellant was not liable for service tax as the services were fully performed outside India.

The Tribunal analyzed the statutory provisions, facts, and submissions, concluding that the appellant did not provide or receive any service within India. Citing the case law, the Tribunal emphasized that services performed entirely outside India are not subject to service tax. As the Business Exhibition Service in question was entirely performed outside India, it was not taxable. The Tribunal set aside the demand for service tax and allowed the appeal, providing consequential relief to the appellant. The judgment was pronounced on 19.5.2017 by Member (Technical) Ashok K. Arya.