Order Date - 03 May 2024

Parties: M/s Microsoft Corporation India Pvt. Ltd. Vs The Commissioner of Service Tax, Delhi, The Commissioner of Central Excise and Service Tax, Gurgaon-I and The Commissioner of Central Tax, And CGST, Gurugram

Facts – 

• The appellants, M/s Microsoft Corporation India Pvt. Ltd., provide Marketing Support Services under an agreement with Microsoft Operations PTE Ltd., Singapore. They don't directly sell products from Microsoft, Singapore in India; those products are handled by independent third-party distributors. The appellants are compensated on a cost-plus basis for their services to the foreign entity. Thus they treated the service as export of service and claimed refund.
• The part of refund was initially granted, and a show cause notice issued to reject the refund and to recover the refund already granted. The learned Commissioner rejecting the refund and confirming the demand of refund already granted. For the subsequent period, Commissioner (Appeals) had sanctioned the credit.
• Hence both the appellant and department has filed the appeal.

Issue – 

• Whether the service provided by the appellant constitute to export of service?

Order – 

• The Tribunal observed that this Bench in the appellant’s own case 2018 (18) GSTL 465 (Tri. Chan.) held that services provided to M/s. Microsoft Operations P. Ltd. Singapore, amount to export of services and hence are not liable to Service Tax, we hold that the services being provided by appellants satisfy the conditions of Export of Services Rules, 2005, hence are not liable to service tax.
• In view of the above, it was held that the services rendered by the appellant to the overseas entity i.e M/s Microsoft, Singapore qualify to be exports and for that reason, the issue stands decided in favour of the appellants. As far as the grant of interest is concerned, the tribunal were in agreement with the submissions of the learned Counsel for the appellant that the provision of interest are automatic and the appellants are entitled to payment of interest, at the rate prescribed statutorily from time to time, on the refunds which are delayed beyond the statutory period of three months.
• In view of the above, Appellant’s Appeals are allowed, and Department’s Appeal are rejected.