Case Law Details
Intimate Fashions Pvt Ltd Vs Commissioner of GST & Central Excise (CESTAT Chennai)
CESTAT Chennai held that service of ERP implementation falls under the category of ‘Information Technology Service’ and the same is taxable only with effect from 16.05.2008. Accordingly, such services received from abroad is leviable to service tax on reverse charge only from 16.05.2008.
Facts- Revenue noticed that common server was installed in the premises of M/s. Bodyline Private Limited, Sri Lanka (BPLSL). The data required for IFIPL was stored in the server installed in BPLSL and accessed by the appellant (IFIPL) through these lines. After completion of the installation, of common server and implementation of SAP in the premises of M/s. BPLSL, the said facility was rendered for use by the appellant also for accessing and retrieving date from the common server with the aid of SAP software for accounting and other purpose through private international lease lines. It appeared that this service is rightly classifiable under the category of ‘Computer Network Services’ / ‘Online Information and Database Access or Retrieval Service’, which are liable to pay service tax on the reverse charge mechanism basis.
The appellant agreed that leased line services are classifiable under ‘Computer Network Services’ from 2006 onwards and paid the service tax thereon. The appellant claimed that the activity relating to graphical tool, Microsoft license, SAP implementation, SAP maintenance, server depreciation, provision are classifiable under ‘Information Technology Services’ only with effect from 16.5.2008.
However, it appeared to Revenue that the entire service activity including the preparatory activity of installation of server, implementation of SAP software, graphical tool for upgradation etc. and allowing the use of the said common server and SAP software available in the premises of M/s. BPL Sri Lanka by the noticee for manipulation of data through computer network and through private international leased lines is rightly classifiable as a whole service under the category of Online Information and Data Access or Retrieval Service only.
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