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TMI Blog2019 (6) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... istributors, who as per the scheme become distributor of the appellant by virtue of purchase of their product, namely, suit length. It can easily be inferred that the Business Support Service includes the activities which support the main business activity like service of providing infrastructure for running an office or a business and like activities - In the present case the appellant has adopted a marketing strategy for sale of its product and has not solicited or provided any Business Support Service to the distributors. It is also relevant that the payments which have been received by the appellant is for sale of its product, namely suit length of various brands on which it has paid the applicable Sales Tax/VAT to the State Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following goods and distributorship application : i) Soaps, brochure and two blank distributorship application forms of ₹ 1600/- ; ii) Suit length, brochure and two blank distributorship forms of ₹ 3100/- in 2005, ₹ 3180/- in 2007, ₹ 3200/- in 2008 and ₹ 3500/- in 2011. 2. From 2006 onwards, the appellant also provided one insurance cover to the distributor free of cost for promoting the distribution of its products in the form of business kits. The department initiated an enquiry as the officers entertained a view that the appellant had been rendering support service for business and commerce to its distributors but was not paying service tax for the consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the sales pattern, it is contended by the appellant that it is running its own business and the distributors are promoting the business of the appellant by introducing new persons who further purchase the business kits from the appellant and make payment for purchasing the business kits (suit length) directly to the appellant. It has further been mentioned during the course of hearing that the distributors are paid commission for introducing new persons to the distribution network of the appellant and on such commission, the distributors are duly discharging their service tax liability. It has also been brought to our notice that the distributors have also been issued show cause notice in respect of the commission received by them under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been discharged by the appellant. It has also been stated that the appellant has discharged his income tax liability showing the activity as the multi-level marketing of the goods and they are in the trading of goods and not providing any Business Support Service . 6. We have also heard learned Departmental Representative who has supported the findings recorded in the order-in-original. 7. After having heard both the sides and after perusal of the records of the appeal, it is clear that the appellant is primarily engaged in marketing/selling of business kits mainly containing suit lengths with certain other promotional documents. This activity of marketing/selling is more akin to multi-level marketing syst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service and pricing policies, infrastructural support services and other transaction processing, Section 65 (104c). Explanation For the purpose of this clause, the expression Infrastructural Support Services includes providing office along with office utilities, reception with competent personnel to handle meetings, secretarial services, internet and telecom facilities, pantry and security. 9. There have been amendments in the definition of the Business Support Service as provided under Section 65 (105) (zzzq) of the Act over the years since its enactment w.e.f. 1 May 2006. The Department has clarified the scope of the service during these years. The Department of Revenue vide Circular No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urce. 5.2 The words operational and administrative assistance have wide connotation and can include certain services already taxed under any other head of more specific description. The correct classification will continue to be governed by Section 65A . 11. From a perusal of the above clarifications, it can easily be inferred that the Business Support Service includes the activities which support the main business activity like service of providing infrastructure for running an office or a business and like activities. In the present case the appellant has adopted a marketing strategy for sale of its product and has not solicited or provided any Business Support Service to the distributors. It is also re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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