2019 (2) TMI 384 - AT - Service Tax

Refund claim - export of services - services rendered to M/s SurePrep LLC, USA for preparation of Income Tax Returns of the USA clients - Place of Provision of Service Rules, 2012 - Held that - the services provided by the appellant fall under Rule 3 of the Place of Provision of Service Rules, 2012 and not under Rule 4 of the Place of Provision of Service Rules, 2012. Besides, I also find that the Department has allowed refund claims for the earlier and subsequent period, hence denying the claim for the impugned period without change in circumstances, in my opinion, is devoid of merit and accordingly, the impugned order deserves to be set aside - Appeal allowed - decided in the favor of the assessee.

Summary

Issues:
Appeal against rejection of refund claims for services provided to overseas client under professional service agreement; Interpretation of Place of Provision of Service Rules, 2012; Validity of impugned order; Comparison with earlier and subsequent refund claims.

Analysis:
The appellant filed two refund claims for services provided to an overseas client for the periods April 2016 to June 2016 and July 2016 to September 2016, amounting to ?16,63,605. The claims were rejected on the grounds that the services did not qualify as exports under the Place of Provision of Service Rules, 2012. The appellant contended that the services fell under Rule 3 of the Rules and not Rule 4 as held by the Commissioner. The appellant argued that similar refund claims for earlier and subsequent periods were approved, making the rejection for the disputed period unjustified. The appellant relied on a previous Tribunal judgment to support their case.

The Tribunal noted that the appellant provided services to the overseas client under a professional service agreement, and all services were consumed abroad. The Tribunal disagreed with the finding that the services were not exports due to data processing in India, stating that the services fell under Rule 3 of the Place of Provision of Service Rules, 2012. Moreover, the Tribunal found the rejection of refund claims for the disputed period while approving claims for earlier and subsequent periods without a change in circumstances unjustified. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief as per law.