Service tax paid on services received from overseas service providers in foreign countries duly refundable

Sharda Cropchem Ltd. Vs Commissioner of CGST & CE (CESTAT Mumbai)

CESTAT Mumbai held that service tax paid on services received from overseas service providers in foreign countries duly refundable as the same cannot be fastened with the liability of service tax as a ‘deemed service provider’ in India.

Facts- The appellant was engaged in marketing and sale of agrochemicals in overseas markets as a merchant trader. Appellant used to purchase goods from one country and sell the same to another country without bringing such goods to India.

Appellant paid purchase commission, sales commission, insurance premium on insurance of goods, legal fees to legal consultants and advocates for attending appellant’s matters in foreign country, professional charges, service charges for services performed, advertising expenses, consultancy charges for registration of products in foreign countries and rent on immovable property. All said charges were paid by the appellant in foreign country. The purchase and sales commission, insurance premium etc. were paid in foreign countries.

From September 2012 to January 2013, appellant paid service tax along with interest for delayed payment totally amounting to Rs.7,85,13,768/- for the above stated services received and consumed in foreign country for the period from 01.10.2007 to 31.12.2012.

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