Case Law Details
M Suresh Company Pvt Ltd Vs Commissioner of Service Tax (CESTAT Mumbai)
CESTAT Mumbai held that as appellant had not outsourced services to the overseas entity, it cannot be said that services provided by overseas entity should be taxed under Business Support Service.
Facts- The appellant is engaged in the business of manufacture and sale of cut and polished diamonds. The appellant procures the rough diamonds from the overseas supplier M/s. Diamond Trading Company Ltd. (DTC), a De-Beers Group Company, London. For procuring the said goods from the overseas entity, the appellant also availed the services of M/s H. Goldie & Co. Ltd., United Kingdom, who assists the appellant in procurement of the goods on commission basis. Apart from supplying the rough diamonds, M/s DTC has also provided the other Value Added Services (VAS) to the appellant.
The department interpreting that such value added services provided by the overseas entity should be taxable under the category of “Business Support Service” (BSS) and since appellant is the recipient of such service in India, it should be liable for payment of Service Tax, u/s. 66A of the Finance Act, 1994. Similarly, the department has also interpreted that the services provided by M/s. H. Goldie & Co. Ltd. and the commission charged by them from the appellant should be considered as a taxable service under the category of “Business Auxiliary Service”.
On the basis of investigation, the department initiated show cause proceedings against the appellant, seeking confirmation of service tax demand on the provision of both the category services namely “Business Support Service” and “Business Auxiliary Service”. The matter arising out of the show cause notices was adjudicated vide the impugned order dated 27.11.2015, wherein the learned Commissioner of Service Tax-IV, Mumbai had confirmed the service tax demand of Rs.83,58,374/- for the period 2011-12 and Rs.54,07,332/- for the period 2012-13 along with interest.
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