Order Date – 02 March 2023

Parties: M/s Kusum Healthcare Pvt. Ltd. Vs Commissioner of Central Excise & Service Tax

Facts –

• The Appellant, M/s Kusum Healthcare Pvt. Ltd., established representative offices in many countries to promote its goods and to liaison with the local authorities in such countries. All the expenses incurred in the supply of goods are claimed as expenses in India.
• A show cause notice dated 18.04.2016 was issued for the period September 2014 to September 2015 alleging that the appellant made payments in foreign currency to its representative offices in countries other than India and such expenses were towards business promotions, marketing and consultancy activity and were taxable in India.

Issue –

• Whether the appellant is liable to pay Service tax under reverse charge in respect of expenses incurred in foreign currency on business promotion and other activities?

Order –

• The Tribunal held that the issue involved in this appeal has also been decided in favour of the appellant in the appellant’s own case for pre-negative list and post-negative list, the demand deserves to be set aside.
• It is clear from the submission of the appellant that the foreign currency expenditure on account of business promotion activities during the relevant period was paid directly by the appellant and even the invoices were raised upon the appellant and not the representative offices.
• The services of advertisement in respect of print-media is exempted in terms of the negative list of services under section 66D(g) of the Finance Act. Thus, the appellant is not liable to pay service tax on the service of advertisement in print- media.
• Hence the appeal is allowed.