The Delhi Bench Of Customs, Excise and Service Tax Appellate Tribunal has held that the advisory services provided by Arvind Singh Mewar would be squarely covered as ‘export of service’ and is not eligible for service tax.
The bench of Dr. Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that the recipient of the service is JC Bamford Excavators Limited (United Kingdom) (JCB, UK) who is also the person at whose desire the activity is done in exchange of monetary consideration.
The appellant, Arvind Singh Mewar was appointed as an advisor by JC Bamford Excavators Limited (United Kingdom) (JCB UK) on the JCB Indian Advisory Council.
As an advisor, the Appellant was required to render advise to JCB UK regarding its aspirations for JCB companies in India It was agreed that a fixed amount would be remitted to the appellant annually.
Upon intimation from the Income Tax Department, it was noticed that the appellant had received certain payments on which TDS was deducted, but no service tax was paid.
Inquiring into the nature of payments, the Department noted that the payments were received in foreign currency as annual fees from JCB UK against advisory services rendered by the Appellant to JCB UK.
Documents in the nature of appointment letters, terms and conditions of appointment, sample invoices, renewed appointment letters, etc. were furnished by the Appellant.
The appellant submitted that the amounts received from JCB UK were not susceptible to service tax as advisory services were exported by the appellant to JCB UK.
A show cause notice was issued to the appellant proposing to demand service tax on consultancy services provided by the appellant for JCB companies in India, alleging that the meetings were held in Delhi or Pune.
It was also alleged that none of the provisions under Rule 4 to 12 of the Place of Provision of Service Rules, 2012 cover the services provided by the appellant JCB UK, as an export of service, since the service provider/supplier was located in the taxable territory.
The show cause was adjudicated and demand was confirmed. However, the adjudicating authority extended cum-tax benefit.
The appellant preferred an appeal wherein the Commissioner (Appeals) upheld the order of the adjudicating authority.
The appellant submitted that the services rendered by the appellant to JCB UK qualify as ‘export of service’ under Rule 6A of the ST Rules, and as the place of provision of such services is outside the taxable territory, no service tax is payable thereon under Section 66B of the Act. Hence, for attracting the charge of service tax under Section 66B, it was imperative that the service must be provided or agreed to be provided in the taxable territory.
The tribunal while allowing the appeal held that the recipient of service is the person at whose desire the activity is done in exchange for a consideration, i.e., the person who is obliged to make payment for the service. The recipient of service would, therefore, be a person at whose instance and expense the service is provided, whether or not he is the beneficiary of the service.
Case Details
Case Title: Arvind Singh Mewar Versus Commissioner of Central Goods Service Tax
Case No.: Service Tax Appeal No. 50986 Of 2021
Date: 21.02.2025
Counsel For Appellant: Shagun Arora
Counsel For Respondent: Manoj Kumar
