2026-VIL-190-CESTAT-HYD-ST
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SERVICE TAX CESTAT Cases

Service Tax - Classification of Services - Appellant is engaged in conducting bio-equivalence (BE) and bio-availability (BA) studies for their domestic and overseas clients. The Department classified these services under the category of 'Technical Testing and Analysis Service' (TTAS) whereas the appellant claimed that the services should be classified under 'Scientific or Technical Consultancy Service' (STCS) - Whether the appellant's BE/BA studies are classifiable under TTAS or STCS - HELD - The appellant's activities of conducting comparative study of test drug and reference drug to determine their bioequivalence fall under the category of TTAS. However, even if the services are classified under TTAS, they would qualify as export of service under Rule 3(2) of the Export of Service Rules, 2005 - The reports, data, and scientific observations were provided to the clients located outside India and used outside India. Even though the actual activities were performed within India, the delivery of the results and technical details to the foreign clients would be considered as part performance of the service outside India. The Tribunal in CST, Ahmedabad Vs BA Research India Ltd and SGS India Pvt Ltd Vs CST, Mumbai-II, held that such provision of services to foreign clients should be treated as export of service – Further, the CBIC has clarified that the term "used outside India" should be interpreted to mean that the benefit of the service should accrue outside India, which is satisfied in the present case - The appellant's BE/BA studies provided to foreign clients should be treated as export of service and not subject to service tax – The impugned order is set aside and the appeal is allowed
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