2023 (4) TMI 167 - HC - Service Tax

Export of service - Place of provision of services - analysis and identification of genetic patterns of a disease/ailment -reports are sent to the clients electronically - Applicability of Rule 3 of the Place of Provision of Services Rules, 2012 - HELD THAT - Undisputed fact of the case is, payment of services received by assessee from foreign clients as a service provider is convertible foreign exchange. Rule 6A of the Service Tax Rules specifies the conditions to be satisfied for treating a service provided as export of service. The CESTAT has rightly recorded that assessee has clearly satisfied the conditions required for treating the service as export of service - the services provided by the assessee is an export of service under Rule 6A of the Service Tax Rules, and thus cannot be chargeable to service tax. Appeal dismissed.

Summary

Issues involved:
The judgment addresses the following Issues:
1. Whether the activity undertaken by the Respondent can be considered as 'export of service' under the provisions of the Finance Act, 1994?
2. Whether Rule 3 of the Place of Provision of Services Rules, 2012 is applicable to the activity undertaken by the Respondent?
3. Whether the Tribunal was right in rejecting the Appeal filed by the Appellant?

Issue 1: Export of Service
The assessee, a private limited company engaged in providing clinical genomic solutions, faced a dispute regarding the classification of its services as export of service under the Finance Act, 1994. The Revenue challenged the Tribunal's decision, arguing that the services provided by the assessee did not qualify as exports. However, the Tribunal found that the conditions for treating the service as an export of service were met by the assessee, leading to the dismissal of the Revenue's appeal.

Issue 2: Application of Place of Provision of Services Rules
The controversy also revolved around whether Rule 3 of the Place of Provision of Services Rules, 2012 applied to the services provided by the assessee. The Revenue contended that the services were within the taxable territory of India based on Rule 4(a) of the PoPS Rules. Conversely, the assessee argued that their services satisfied the conditions outlined in Rule 6A of the Service Tax Rules, 1994, in conjunction with Rule 3 of the PoPS Rules. Ultimately, the Court upheld the Tribunal's decision, emphasizing that the services provided by the assessee qualified as an export of service under Rule 6A.

Issue 3: Tribunal's Rejection of Appeal
The final issue pertained to the Tribunal's rejection of the Appeal filed by the Revenue. The Court carefully analyzed the contentions presented by both parties and examined the records. It was established that the services provided by the assessee indeed constituted an export of service under Rule 6A of the Service Tax Rules. Consequently, the Court dismissed the appeal and confirmed the Tribunal's order, stating that the services were not chargeable to service tax.

In conclusion, the judgment affirmed that the services rendered by the assessee qualified as exports under the relevant rules and regulations, leading to the dismissal of the Revenue's appeal and the confirmation of the Tribunal's decision.