Service Tax
TRT-2025-
Cestat Chennai
Date:-23-06-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 23 June 2023
Parties: SNQS International Socks Private Limited (Trading Division) Vs Commissioner of Central Excise and Service Tax
Facts –
- The Appellants, SNQS International Socks Private Limited, are engaged in providing design and product development, evaluation and vendor development, quality monitoring and other related services to its foreign client in procurement of goods and receives remuneration for the above services. During the period from October 2014 to November 2014 the appellant have filed a refund claim for Service Tax erroneously paid by them under ‘business auxiliary service’.
- A show cause notice dated 06.10.2015 issued to the appellant alleging that the appellant had acted as an intermediary. As such, it appeared to the Department that the Service Tax paid by them was proper and the refund claim filed by the appellant appeared to be unsustainable.
Issue –
- Whether the service of the appellant is to be treated as ‘business auxiliary service’ or intermediary?
Order –
- The Tribunal observed that the appellant has not engaged any other service provider for the process of procuring the specific goods to be exported as per the requirement of his foreign client. All these services are rendered only to M/s. Primark, Dublin, Ireland on his own account and he is receiving the consideration for the services as a percentage of FOB value of the merchandise exported.
- There is no evidence on record to show that he is receiving any consideration from the vendors developed by him and as such, the services could not be termed as falling under the category of “intermediary”.
- The activities of the appellant will be coming under business support services and also would not be falling under intermediary services, the place of provision of the services applicable to the appellant, is the location of the service recipient, in terms of Rule 3 of the Place of Provision of Services Rules, 2012.
- Rule 9 is not applicable to the appellant as the services rendered by him in relation to procurement of goods to the foreign client are on his own account. The appellant is not said to be acting as an intermediary i.e., the services were performed by the appellant on a principal-to-principal basis and at arm’s length basis.
- As all the conditions prescribed under Rule 6A of the Service Tax Rules, 1994 are satisfied, the services of the appellant are to be treated as export of services. The appeal is allowed.
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