2026-VIL-1531-CESTAT-MUM-ST
  1. Home
  2. 2026-VIL-1531-CESTAT-MUM-ST

SERVICE TAX CESTAT Cases

Service Tax - Export of services, Services provided by e-commerce marketplace operator to foreign affiliate - Determination of location of service use - Appellant provides services to affiliate eBay International AG such as promotion coordination with vendors marketing market data collection remittance of revenue operation of helpdesk and other administrative services for eBay India website - Appellant contends that services qualify as export since they are provided to recipient located outside India and payment received in foreign exchange and benefit of services accrue to foreign affiliate - Whether services provided in relation to business activities in India for foreign affiliate constitute export of services - HELD - Export of Services Rules 2005 provides three categories of services - Category I applies to services with nexus to immovable property - Category II applies to services where place of performance can be established - Category III applies to remaining services generally including knowledge or technique based services not linked to identifiable immovable property or whose location of performance cannot be readily identified - For Category III services which include BAS the relevant factor is location of service receiver and not place of performance. For Category III services export of service may take place even when all relevant activities take place in India so long as benefits of these services accrue outside India - Board's circular dated 24.02.2009 clarifies that for Category III services the phrase used outside India is to be interpreted to mean that benefit of service should accrue outside India - Board's circular dated 13.05.2011 further clarified that words accrual of benefit are not restricted to mere impact on bottom-line of person who pays for service. All activities extended by appellant to foreign subsidiary including marketing research consultancy promotion of sales through advertisement take place in India. Appellant did not conduct any market research or activity outside India while providing BAS – The services failed to satisfy essential qualification of service being delivered and used outside India. However Revenue concluded that services provided were not export of services they were provided within taxable territory in India. In absence of any notice for recovery of service tax due from appellant in respect of services not considered to be export of services in appropriate proceedings the refund claims filed in terms of Rule 5 of CCR, 2004 cannot be rejected. Revenue cannot have two stands in respect of same services - If Revenue's case is that activities undertaken do not amount to export of service then proceedings need to be initiated for demanding service tax in respect of taxable services provided. By not initiating any such proceedings, Revenue itself has allowed these taxable services as export of services. Having done so Revenue cannot in proceeding under Rule 5 for refund take contrary stand and deny refund treating services not to be export of services - Impugned order is set aside and appeals are allowed
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Kasi Viswanathan V

Weekly Summary

VIL Video

GST Critical issues: ITC on...
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Security-Code
New Code?

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Security-Code
New Code?

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?