Case Law Details
Fifth Avenue Sourcing Private Limited Vs Commissioner of Central Excise and Service Tax (CESTAT Chennai)
CESTAT Chennai held that services rendered to the domestic vendors by procuring orders from foreign companies rendered are classifiable under Support Services of Business or Commerce (SSBC) and not under Business Auxiliary Service (BAS).
Facts- FASPL rendered services to foreign companies for evaluation of prospective garment manufacturers, processing purchase orders, customer management, tracking of delivery schedules, operational assistance for marketing, customer service, pricing policies, managing, distribution, logistics etc. They also rendered services to domestic vendors by procuring orders for them from foreign companies, rendered operational assistance in execution of purchase orders and ensured receipt of sale proceeds from foreign buyers.
The case made out by Revenue against FASPL is that the above activities fall under the category of ‘Business Auxiliary Service’ (BAS) and the consideration received is liable to service tax. On the other hand, FASPL is of the view that the above services are liable to service tax under ‘Business Support Services’ (BSS) and that no service tax is payable as the said services is required to be treated as export of services among other things.
Conclusion- We find that from a plain reading of clause (104c) of Section 65 that “support services of business or commerce” specifically relates to evaluation of prospective customers, telemarketing, processing of purchase orders and fulfilment services, information and tracking of delivery schedules, managing distribution and logistics, etc., which were the activities undertaken by the appellant, while the definition of business auxiliary service under clause (19) of Section 65 of the Act is more general in nature. Hence, the services have been correctly classified under the specific heading of ‘support services of business or commerce’ and does not require us to traverse through section 65A(2) of the Finance Act, 1994.
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