9911796707
TMI Blog2018 (8) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... ant are chargeable to Service Tax. And the commission paid was taxable under ‘Business Auxiliary Service’. Merely because the name of the guarantee has been changed from ‘Bank’ to ‘Corporate’ it cannot be said that it won’t fall under ‘Business Auxiliary Service’ as defined under Section 65 (105) of the Finance Act, 1994 - demand of Service Tax on the Corporate Guarantee Commission upheld. Agency Commission - benefit of N/N. 13/2003-ST dated 20/06/2003 (as amended) - Held that:- This notification exempts Service Tax payable on Commission Agent Services in relation to agricultural produce. The lower Authorities have not extended the benefit while taking the view that the committee rice is not covered under the said notification but in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness Auxiliary Service under Section 65(19) of the Finance Act, 1994. Such demands were made under the reverse charge mechanism under Section 66A. ii. Corporate Guarantee Commission:- For facilitating the appellant to obtain loan from various Indian Banks, they obtained corporate guarantee in favour of banks in India from M/s Olam International Limited, Singapore. In lieu of the said guarantee, the appellant was required to pay commission amounting to 1 per cent of the value of such corporate guarantee to their parent company at Singapore. Such amounts were paid in foreign exchange. The Service Tax was demanded on such commission, under reverse charge basis, under the category of Business Auxiliary Service under Section 65 (105) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid to the appellant s parent company in Singapore towards provision of guarantee for obtaining loan by the appellant. He submitted that the payment of such commission cannot be said to be for procurement of any service. In this connection, he relied on the Tribunal decision in the case of Abdullabhai Abdul Kader v/s Commissioner 2017 (4) GSTL 38 (Tri Mum.). In the said case the Tribunal had occasion to examine the case in which the appellant therein provided the service of opening L/C to various customers. The Tribunal in that case held that providing the facility of L/C through their bank to various importers cannot be charged to Service Tax under the category of Business Auxiliary Service since it was not in connection with procuremen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional Ltd., Singapore did not procure service from the bank for the appellant. He referred to the CBEC Circular dated 10/09/2004 (issued at the time of expanding the coverage of Business Auxiliary Service,) in which it is clarified that BAS will be applicable to instances wherein a commercial concern provides service on behalf of the client. Since that is not the fact in the present case, he reiterated that the impugned orders merit to be set aside. 7. Heard both sides and perused the appeal records. 8. The definition of Business Auxiliary Service is very wide and it covers all the activities which promotes business of clients. The services detailed under clause iv of Section 65 (105) (zzb) of the Act made taxable from 10/09/2004. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidence, in a country other than India, and b. Received by a person (hereinafter referred to as the recipient) who has his place of business, fixed establishment, permanent address or usual place of residence in India, such service shall, for the purpose of this section, be the taxable service, and such taxable service shall be treated as if the recipient had himself provided the service of India, and accordingly all the provisions of Chapter V of the Finance Act, 1994 shall apply. And whereas, Rule 3 of Taxation of Services (provided from outside India received in India) Rules, 2006, w.e.f. 19.04.06 reads as under: 3. Subject to Section 66A of the Act, the taxable services provided from outside India received in In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se the name of the guarantee has been changed from Bank to Corporate it cannot be said that it won t fall under Business Auxiliary Service as defined under Section 65 (105) of the Finance Act, 1994. 10. Agency Commission: - This commission has been paid by the appellant to Foreign Commission Agents towards procurement of export orders for the appellant for export of rice. The demand for Service Tax has been raised against the appellant on reverse charge basis under the Business Auxiliary Service . The contention of the appellant is that they will be entitled to the benefit of the Notification No. 13/2003-ST dated 20/06/2003 (as amended). This notification exempts Service Tax payable on Commission Agent Services in relation to agri ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
