9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (4) TMI 438 - AT - Service TaxCharge on service tax on services received from outside India - was sending their new or existing product to Germany (foreign service provider) for know-how or testing - recipient of services - Difference of Opinion - Held that - Section 66A read with Rule 3 proposes to seek to levy Service Tax on any service provided from outside India and received in India. The proviso seeks to cover such cases where part of taxable service is performed in India and part outside India. The main Section refers to the entire service being provided from outside India. As we are sitting in a Division Bench, we consider it appropriate to refer the matter to a Larger Bench to examine this issue. The Registry shall place the matter before the President for passing appropriate orders.
Issues Involved:
1. Demand of Service Tax for services provided under Section 65(105)(zzi) of the Finance Act, 1994. 2. Interpretation of Section 66A of the Finance Act, 1994 and Rule 3 of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006. 3. Applicability of Service Tax on services performed entirely outside India. Detailed Analysis: Issue 1: Demand of Service Tax for services provided under Section 65(105)(zzi) of the Finance Act, 1994 The appeal arises from an order confirming the demand of Service Tax for services provided under Section 65(105)(zzi) of the Finance Act, 1994. The relevant section defines "Taxable Service" as any service provided to any person by a technical inspection and certification agency, in relation to technical inspection and certification. The appellant argued that the foreign firm in Germany was not engaged in providing certification services and no evidence was presented that the foreign company issued any certification maintaining specified standards. However, the adjudicating authority confirmed part of the demand for the period after 18 April 2006. Issue 2: Interpretation of Section 66A of the Finance Act, 1994 and Rule 3 of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 Section 66A deals with the "Charge of Service Tax on services received from outside India." It stipulates that services received by a person in India from a service provider outside India shall be taxable as if the recipient had provided the service in India. Rule 3 of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, specifies that taxable services provided from outside India and received in India shall be treated as performed in India if they are partly performed in India. Issue 3: Applicability of Service Tax on services performed entirely outside India The appellant relied on judgments in Crompton Greaves Ltd. and Total Oil India Ltd., where it was held that Service Tax could be levied only if the service was performed partly in India. The Tribunal in Crompton Greaves Ltd. noted that the service in question was performed entirely outside India, and hence, could not be considered as received in India. Similarly, in Total Oil India Ltd., the Tribunal held that technical testing and analysis services performed wholly outside India were not liable to Service Tax under Rule 3(ii). Conclusion: The Tribunal considered the judgments in Crompton Greaves Ltd. and Total Oil India Ltd., which interpreted the proviso to Rule 3(ii) as applicable only when part of the service is performed in India. Since the services in question were performed entirely outside India, the Tribunal concluded that the services could not be deemed to be received in India, and thus, were not liable to Service Tax. The matter was referred to a Larger Bench for further examination due to the significance of the interpretation of Section 66A and Rule 3(ii). Order: The Registry was directed to place the matter before the President for appropriate orders. The appeal was dictated and pronounced in the open court.
|
