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TMI Blog2014 (8) TMI 711X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure by way of salaries or other expenses cannot be said to be consideration paid for any service rendered by the branch to the head office. The purpose of Section 66A is for taxing the import of services and not for taxing monetary transactions between the branch and head-office. For e.g. if a branch of an Indian bank is situated abroad, Section 66A does not envisage treating the foreign branch as a separate entity so far as the internal transactions are concerned, if the head-office reimburses to the foreign branch expenses incurred by them abroad. It cannot be said to be a consideration for any services rendered. The reason is that the service provider, service recipient and place of performance of service are all located abr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. A/676/13/CSTB/CI dated 06/03/2013 - 2014 (33) S.T.R. 105 (Tri. - Mumbai) with the following directions: 6. In view of the above factual and legal position, we are of the considered view that the matter has to go back to the original adjudicating authority for consideration afresh with regard to the question, whether he has any jurisdiction to demand service tax on activities which are completely rendered outside India and on which tax liability has been discharged under the local laws where the activity has taken place. All issues are kept open. The appellant is at liberty to produce evidence of discharge of tax liability on the transactions rendered abroad under the local laws before the adjudicating authority. 2.2 In pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome over expenditure of the branches is remitted to their head office of the appellant in India. The department was of the view that the services rendered by the overseas branches on behalf of the parent-company falls under the category of Business Auxiliary Service' and accordingly, the entire amount received by the overseas branches are liable to service tax. Therefore, a show cause notice dated 24/04/2012 was issued demanding service tax of ₹ 17,29,61,546/- on the total receipt of the overseas branches amounting to ₹ 1,55,22,06,404/-. 2.2 The appellant had also permanent establishment abroad by way of personnel located in the offices of their various clients abroad. These personnel rendered service to the overseas cli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llants have rendered the service, since service has been rendered to the overseas customers, it amounts to export of service. Thirdly, the appellant has received the proceeds in convertible foreign exchange and they have not made any payments to the branches. Therefore, the question of payment of any service tax on reverse charge basis under Section 66A of the Finance Act, 1994 would not arise at all as there is no payment by the appellant to their branches abroad for rendering of any services. 3.2 For the services rendered abroad, they have discharged tax liabilities such as GST/VAT etc. in accordance with the local laws. Therefore, on the same transaction, the authorities in India do not have any jurisdiction to impose any service tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 66A a legal fiction has been created whereby a service provided by a person who has a business or fixed establishment or has a permanent address or usual place of residence in a country other than India and such services are received by a person who has his place of business, fixed establishment and permanent address in India and the same shall be treated as a service and service tax liability would accrue. In the present case, the appellant has branches abroad. The services provided by the branches to the head office in India would amount to import of service and liable to service tax and, therefore, the impugned order is sustainable in law. 5. We have carefully considered the submissions. The short question for consideration is wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are all located abroad. The purpose of Section 66A is not to tax service transactions taking place abroad. Such transactions are beyond the taxing jurisdiction of the Indian authorities. This view is supported by the decisions relied upon by the appellant cited supra. Further, in respect of outbound tourism, in the case of Cox Kings India Ltd. vs. Commissioner of Service Tax- 10-12-2013, this Tribunal held the view that though the service provider and service recipients are Indian entities, since the service is rendered abroad, there is no jurisdiction to tax the transactions in India. The ratio of the said decisions applies squarely to the facts of the case before us. 5.1 We also notice that in respect of certain expenditure incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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