2018 (10) TMI 554 - AT - Service Tax

Manpower Recruitment & Supply Agency Service - amounts received as consideration from District TB Control Society, sponsored by Government of Andhra Pradesh for implementation of Revised National Tuberculosis Control Programme - Held that - It is seen from the said contract/MOU that the District TB Control Society being empowered to implement the programmes which is mandated to the appellant herein - though the services rendered by the appellant being the services of a non-governmental organisation with no profit motive, the services would definitely be classified under the category of Manpower Recruitment and Supply Agency Services . The claim of the appellant that these are reimbursable expenses is also not established from the contract which have been produced in the appeal memorandum. Appeal dismissed - decided against appellant.

Summary

Issues:
Service tax liability on amounts received by the appellant from District TB Control Society for implementing Revised National Tuberculosis Control Programme.

Analysis:
The appellant, a non-governmental and non-profit organization, appealed against the service tax liability imposed on the amounts received as consideration for implementing the Revised National Tuberculosis Control Programme. The appellant argued that the received amounts were reimbursement for expenses and not for supply of manpower or recruitment agency services. The appellant highlighted that they did not charge any service fees beyond the expenses incurred. The appellant relied on a decision of the Hon'ble High Court of Madras to support their claim that reimbursable expenses need not be taxed. On the other hand, the Revenue contended that the MOU indicated the appellant as a supplier of manpower directly under the District TB Society, responsible for assigning work areas and monitoring performance.

Upon reviewing the submissions and the MOU/agreement, the Tribunal observed that the lower authorities sought to tax the amount received by the appellant under the category of "Manpower Recruitment & Supply Agency Service." The MOU clearly outlined the terms of providing staff, including specific payment details and termination clauses. The Tribunal noted that the District TB Control Society mandated the implementation of programs to the appellant. Despite the appellant's non-profit motive, the Tribunal classified the services as "Manpower Recruitment and Supply Agency Services" based on the terms of the MOU. The Tribunal concluded that the impugned order was legal and correct, as the appellant failed to establish that the amounts were reimbursable expenses as claimed.

In the final decision, the Tribunal upheld the impugned order, rejecting the appeal and affirming the service tax liability on the amounts received by the appellant from the District TB Control Society for implementing the Revised National Tuberculosis Control Programme. The judgment was pronounced in open court on 12.09.2018 by the members of the Tribunal.