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TMI Blog2012 (7) TMI 667X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank of India, Foreign Investment Promotion Board etc. and also for filing application for import export code, returns under Income Tax Act, returns with the office of Registrar of Companies, sales tax returns etc. which activities are hereinafter collectively referred to as "Compliance Services" 2. The entry in Finance Act, 1994 for taxing Management Consultancy Service came into force on 16.10.98 and ever since that date they have been paying service tax on activities which they classified under the entry in the Finance Act 1994 for Management Consultancy Service. However, they did not consider that Compliance Services would fall within the definition of Management Consultancy Service and they were not paying service tax on such activit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larification in the matter as to whether activities in relation to complying with rules and regulations would come under the scope of "Management Consultancy Service". The Director General of Service Tax vide letter No V/DGST/21-26MC/9/99 dated 28-01-99 clarified that such activities would not be part of Management Consultancy Service. This view was reiterated in a letter F. No. 341/21/99-TRU dated 20-08-99 issued by TRU clarifying that practitioners who help in complying with ESI and PF Regulations would not come within the meaning of Management Consultant. They argue that these clarifications reinforced their own interpretation that service tax was not payable on such activities and that is the reason why they were not paying service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired for efficient and effective functioning of an organisation, any advisory services rendered in merger and acquisition transaction are also includible under the taxable service rendered by 'management consultant'. However, those agencies providing services as per the requirement of any statute or regulation such as Takeover Regulations of SEBI and, if their role is limited to the compliance of such act or regulations and not governed by any contractual relationship with the advisee company, then such services will not be covered under scope of 'management consultant'." 8. The Counsel also relies on the decision of the Tribunal in CCE v. Future Polyesters Ltd. [Final Order No. 782 of 2011, dated 8-7-2011] ruling that such services will n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various statues as well as pay roll and financial accounting services, further detailed as follows: Immigration services: Relating to assistance provided to expatriates for obtaining registration with the Foreigners Regional Registration office; Litigation support: Assistant in preparation and filing of replies to notices issued by department, attending hearings and various other litigation support services; Personal tax: Assistance in preparation and filing of Indian tax returns for Indian nationals outside India as well as for expatriates in India; Private Client Services: Assistant in preparation and filing of returns setting up trust funds, etc. for high net worth individuals; Stock Incentive Plans: Various compliance services in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tlement, Professional tax, returns, Provident Fund returns, etc; and (ii) Financial Accounting: Maintaining the books of accounts for the clients, filing their withholding tax returns, etc." 11. The ld. A.R. submits that the key words in the definition are that : (a) the person must be engaged in providing any service, either directly or indirectly in connection with the management of any organisation in any manner, and (b) includes any person who renders any advice, consultancy or technical assistance, relating to conceptualizing, devising, development, medication, rectification or up-gradation of any working system of any organisation. 12. According to him the above definition is extremely broad, as it encompasses a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties could not fall under the definition of Management Consultancy Service. We are of the view that though compliance with laws is part of the responsibilities of management such responsibility per se cannot bring it into the ambit of the words "in connection with the management of any organisation" used in section 65(105)(r) and section 65 (65) of Finance Act, 1994 to tax such services. In this matter we see merit in the clarification given by CBEC in para 9 of its circular dated 27-06-2001. The decision of the Apex Court in the case of Parle Exports (P) Ltd. (supra) gives the rule that a taxing entry should be understood in the same way in which these are understood in the ordinary parlance. According to CBEC the ordinary meaning of manag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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