2018 (8) TMI 805 - AT - Service Tax

Business Auxiliary Services - appellant entered into an agreement with M/s St Micro Electronic Pvt. Ltd Asia Pacific, Singapore for market survey in India for finding a market for the goods being manufactured by the foreign entity - foreign entity has no office in India - Held that - The matter has now been decided by Third Member and as per the Final Majority Order, the services have to be treated as export of services thus attracting no tax liability. To the same effect is the decision of the Tribunal in the case of Gap International Sourcing (India) Pvt. Ltd. 2014 (3) TMI 696 - CESTAT NEW DELHI - appeal allowed - decided in favor of appellant.

Summary

Issues: Applicability of service tax on market survey services provided to a foreign entity without an office in India.

The judgment addresses the issue of whether market survey services provided by an Indian entity to a foreign company without an office in India are liable for service tax under "Business Auxiliary Services." The appellant entered into an agreement with a foreign entity for market survey services, leading to a demand for service tax, interest, and penalty by the Revenue. The Commissioner confirmed the demand, prompting the appellant to appeal. The Tribunal noted settled decisions in similar cases and emphasized the need to await the finality of decisions, particularly when a matter is referred to a Third Member. The Tribunal highlighted that the services provided should be treated as export of services, attracting no tax liability, as per the Final Majority Order and previous rulings. Consequently, the Tribunal set aside the impugned order, allowing the appeal and granting relief to the appellant.

In conclusion, the judgment by the Appellate Tribunal CESTAT ALLAHABAD delves into the intricacies of service tax liability concerning market survey services provided by an Indian entity to a foreign company without a presence in India. The Tribunal's detailed analysis, referencing past decisions and the importance of awaiting finality in rulings, culminated in the determination that the services rendered should be considered as export of services, thereby absolving the appellant of tax liability. This comprehensive analysis underscores the significance of legal precedent and procedural diligence in adjudicating tax disputes, ultimately resulting in a favorable outcome for the appellant.