Microsoft case - Service provided to Principal situated in Singapore to market products in India - Is Export of Services

In the famous Microsoft case reported by us almost three years ago,due to divergent views of the Members constituting the Division Bench, the following was the difference of opinion framed for decision by the Third Member -

(i) Whether the impugned Business Auxiliary Service of promotion of market in India for foreign principal made in terms of Article 2 and 3 of the Agreement dated 01/07/2005 amounts to export of service considering Article 286 (1) (b) of the Constitution of India read with Apex decisions in the case of State of Kerala and Others Vs. The Cochin Coal Company Ltd. - (1961) 12 STC 1 (SC) , Burmah Shell Oil Storage and Distributing Co, of India Ltd. and Other Vs. Commercial Tax Officers and Others - 2002-TIOL-966-SC-CT-CB and the provisions of Export Service Rules, 2005 as well as Circular No. 141/10/2011 - TRU dated 13.05.2011 issued by CBE & C?

(ii) Whether the impugned Business Auxiliary Service of promotion of market in India for foreign principal made in terms of Article 2 and 3 of the Agreement dated 01/07/2005 was delivered outside India and used thereat and is immune from levy of service tax as export of service in terms of the provisions of Export Service Rules, 2005 read with circulars issued by CBE & C excluding Circular No.141/10/2011 - TRU dated 13.05.2011?

(iii) Whether the impugned Business Auxiliary Service provided in terms of Agreement dated 01/07/2005 is governed by the principles of equivalence and destination based consumption tax as well as law laid down by Apex Court in All India Federation of Tax Practitioners - 2007-TIOL-149-SC-STand Association of Leasing and Financial Services Companies Vs. UOI - 2010-TIOL-87-SC-ST-LB.

(iv) The Appeal in Appeal No. ST-828/2010 without being argued by both sides whether can be said to have involved the issue that output service was exported or conclusion is to be arrived at upon hearing both sides?

(v) Whether demand for the normal period sustains subject to grant of cum-tax benefit and CENVAT Credit?

We had reported this order as - 2011-TIOL-1508-CESTAT-DEL.

The Third Member has passed an order recently.

After hearing lengthy submissions by both sides, the Member (J) inter alia observed that in view of the Majority decision in Paul Merchants Ltd. - 2012-TIOL-1877-CESTAT-DEL it has to be held that services were being exported in terms of Export of Services Rules, 2005 and not liable to Service Tax.

The third Member also observed –

++ Even otherwise also, I find that the disputed service is the service being provided by the appellant to his principal located in Singapore. The marketing operations done by the appellant in India cannot be said to be at the behest of any Indian customer. The service being provided may or may not result in any sales of the product on Indian soil. The transactions and activities between the appellant and Singapore principal company are the disputed activities. As such, the services are being provided by the appellant to Singapore recipient company and to be used by them at Singapore, may be for the purpose of the sale of their product in India, have to be held as export of services.

Noting that in the case of Larsen & Toubro - 2013-TIOL-1458-CESTAT-DEL it is held that a majority decision is Larger Bench decision having the same binding criteria as that of Larger Bench, the Member (J) opined that the majority decision in the case of Paul Merchants is required to be followed.

 

The third Member also adverted to the decisions in Gap International Sourcing (India) Pvt. Ltd.- 2014-TIOL-465-CESTAT-DEL, Vodafone Essar Cellular Ltd.- 2013-TIOL-566-CESTAT-MUM, Bayer Material Science Pvt. Ltd.- 2014-TIOL-1084-CESTAT-MUM to conclude that Business Auxiliary services provided by the appellant to their principal company located in Singapore is to be considered as export of services.

 

Observing that the Revenue representative had not brought to notice any decision which is contrary to the law declared in the above referred decisions, the third Member agreed with the findings of the Member (Technical) of the referral Bench.

 

Inasmuch as the services provided by the appellant are covered by the Export of Service Rules, 2005 and are not liable to service tax is the Majority view.

 

The Appeal was allowed.

 

Source: TIOL

 

No TDS on Service Tax Component - CBDT Circular

The CBDT has issued Circular No. 1/2014 dated 13.01.2014 pointing out that the Rajasthan High Court has taken the view in CIT(TDS) vs. Rajashthan Urban Infrastructure - 

"that if as per the terms of the agreement between the payer and the payee, the amount of service-tax is to be paid separately and was not included in the fees for professional services or technical services, no TDS is required to be made on the service-tax component u/s 194J of the Act"

Pursuant thereto, the CBDT has decided in exercise of powers u/s 119 that wherever the terms of the agreement/ contract between the payer and the payee, the service tax component comprised in the amount is indicated separately, tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid/payable without including such service tax component. 

Circular can be viewed at:

http://goo.gl/tvL9QL

CIRCULAR NO. 1/2014 [, DATED 13-1-2014]

Subject: TDS under Chapter XVII-B of the Income-tax Act, 1961 on service tax component comprised in the payments made to residents - clarification regarding

 

The Board had issued a Circular No.4/2008 dated 28-04-2008 wherein it was clarified that tax is to be deducted at source under section 194-I of the Income-tax Act, 1961 (hereafter referred to as 'the Act'), on the amount of rent paid/payable without including the service tax component. Representations/letters has been received seeking clarification whether such principle can be extended to other provisions of the Act also.

 

2. Attention of CBDT has also been drawn to the judgement of the Hon'ble Rajasthan High Court dated 1-7-2013, in the case of CIT (TDS) Jaipur v. Rajasthan Urban Infrastructure (Income-tax Appeal No.235, 222, 238 and 239/2011), holding that if as per the terms of the agreement between the payer and the payee, the amount of service tax is to be paid separately and was not included in the fees for professional services or technical services, no TDS is required to be made on the service tax component u/s 194J of the Act.

 

3. The matter has been examined afresh. In exercise of the powers conferred under section 119 of the Act, the Board has decided that wherever in terms of the agreement/contract between the payer and the payee, the service tax component comprised in the amount payable to a resident is indicated separately, tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid/payable without including such service tax component.

 

4. This circular may be brought to the notice of all officer for compliance

F.NO.275/59/2012-IT(B)]

 

Levy of Service Tax on services provided by Resident Welfare Association (RWA)

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise& Customs
Tax Research Unit
North Block, New Delhi

CIRCULAR NO

175 /01 /2014 � ST, Dated: January 10, 2014

 

Subject : Levy of service tax on services provided by aResident Welfare Association (RWA)

to its own members - regarding.

 

Service tax on 'club or association service' which covers Resident Welfare Association (RWA) was introduced with effect from 16.06.2005, vide section 65(105)(zzze) read with section 65(25a)[(25a) was later renumbered as (25aa)]. Under the positive list approach which was followed prior to 1 st July 2012, exemption was available under notification No. 8/2007-ST dated 01.03.2007, if the total consideration received from an individual member by the RWA for the services does not exceed three thousand rupees per month. This notification was rescinded vide notification No. 34/2012-ST dated 20 th June 2012, with effect from 1 st July, 2012.

 

2. Under the negative list approach, with effect from 1 st July, 2012, notification No.25/2012-ST [sl.no.28 (c)] provides for exemption to service by a RWA to its own members by way of reimbursement of charges or share of contribution up to five thousand rupees per month per member for sourcing of goods or services from a third person for the common use of its members.

 

Certain doubts have been raised regarding the scope of the present exemption extended to RWAs under the negative list approach. These doubts have been examined and clarifications are given below:

 

Sl. No.	Doubt	Clarification
1.	(i) In a residential complex, monthly contribution collected from members is used by the RWA for the purpose of making payments to the third parties, in respect of commonly used services or goods [Example: for providing security service for the residential complex, maintenance or upkeep of common area and common facilities like lift, water sump, health and fitness centre, swimming pool, payment of electricity Bill for the common area and lift, etc.]. Is service tax leviable? (ii) If the contribution of a member/s of a RWA exceeds five thousand rupees per month, how should the service tax liability be calculated?	Exemption at Sl. No. 28 (c) in notification No. 25/2012-ST is provided specifically with reference to service provided by an unincorporated body or a non�profit entity registered under any law for the time being in force such as RWAs, to its own members. However, a monetary ceiling has been prescribed for this exemption, calculated in the form of five thousand rupees per month per member contribution to the RWA, for sourcing of goods or services from third person for the common use of its members. If per month per member contribution of any or some members of a RWA exceeds five thousand rupees, the entire contribution of such members whose per month contribution exceeds five thousand rupees would be ineligible for the exemption under the said notification. Service tax would then be leviable on the aggregate amount of monthly contribution of such members.
2.	(i)Is threshold exemption under notification No. 33/2012-ST available to RWA? (ii)Does 'aggregate value' for the pusrpose of threshold exemption, include the value of exempt service?	Threshold exemption available under notification No. 33/2012-ST is applicable to a RWA, subject to conditions prescribed in the notification. Under this notification, taxable services of aggregate value not exceeding ten lakh rupees in any financial year is exempted from service tax. As per the definition of 'aggregate value'provided in Explanation B of the notification, aggregate value does not include the value of services which are exempt from service tax.
3.	If a RWA provides certain services such as payment of electricity or water bill issued by third person, in the name of its members, acting as a 'pure agent' of its members, is exclusion from value of taxable service available for the purposes of exemptions provided in Notification 33/2012-ST or 25/2012-ST ?	In Rule 5(2) of the Service Tax (Determination of Value) Rules, 2006, it is provided that expenditure or costs incurred by a service provider as a pure agent of the recipient of service shall be excluded from the value of taxable service, subject to the conditions specified in the Rule. For illustration, where the payment for an electricity bill raised by an electricity transmission or distribution utility in the name of the owner of an apartment in respect of electricity consumed thereon, is collected and paid by the RWA to the utility, without charging any commission or a consideration by any other name, the RWA is acting as a pure agent and hence exclusion from the value of taxable service would be available. However, in the case of electricity bills issued in the name of RWA, in respect of electricity consumed for common use of lifts, motor pumps for water supply, lights in common area, etc., since there is no agent involved in these transactions, the exclusion from the value of taxable service would not be available.
4.	Is CENVAT credit available to RWA for payment of service tax?	RWA may avail cenvat credit and use the same for payment of service tax, in accordance with the Cenvat Credit Rules.

 

3. Trade Notice/ Public Notice to be issued. Hindi version to follow.

F. No.354/237/2013-TRU

[Raj Kumar Digvijay]
Under Secretary to the Government of India

No Service Tax on Electricity Charges (Either from Grid or thru DG Set) reimbursement from Tenants - CESTAT

2013-TIOL-1751-CESTAT-MUM

 

Appeal No.ST/383, 384, 416, 469 & 504/12-Mum

Arising out of Order-in-Original/Appeal No. 27-28-/P.III/ST/ Commr /2011-12, P.III/RS/184/2012, 56-57/P.III/ST/ Commr /2011-12 & 63/P.III/ST/ Commr /2011-12,
Dated : 29.02.2012, 30.5.2012, 29.03.2012 respectively
Passed by the Commissioner of Central Excise & Service Tax Pune.III

Date of Hearing: 18.4.2013
Date of Decision: 18.4.2013

1) M/s ICC REALITY (INDIA) PVT LTD
2) M/s INDIA LAND INFRASTRUCTURE DEVELOPMENT PVT LTD
3) M/s CHITRALI PROPERTIES PVT LTD
4) M/s EON HINJEWADI INFRASTRUCTURE P LTD
5) M/s VANSUM INDUSTRIES

Vs

COMMISSIONER OF CENTRAL EXCISE, PUNE-III

Appellants Rep by: Shri Bhrat Raichandai , Adv. with Shri V Jain, CA for (sr.no. 1,2 & 4) Shri J C Patel, Adv. (sr.no.3) And Shri Shushant Murthy, Adv. (sr.no.5)

Respondents Rep by: Shri Rakesh Goyal , Addl. Commr (A.R.) And Shri P N Das, Commr .(A.R.)
CORAM: S S Kang, Vice President
S K Gaule , Member( T)

 

ST - Rule 5 of Service Tax (Determination of Value) Rules, 2006 - Applicant collecting rent and paying

 

ST under Renting of Immovable Property Service - however, electricity charges collected from tenants not included in value of taxable service – As E lectricity is goods chargeable to duty under CE Tariff as well as under the Maharashtra Value Added Tax Act, 2002, therefore, the supply of electricity to tenant amounts to sale of goods and not supply of service – In terms of Notfn . 12/03-ST value of goods supplied by service provider to service recipient is exempt from service tax – Electricity charges cannot form part of taxable value – Orders set aside and appeals allowed: CESTAT [ para 9]

Appeals allowed

ORDER NO.A/968-972/13/CSTB/C-I

Per: S S Kang:

Heard both sides Common issue is involved and therefore, these appeals are being taken up together for disposal.

 

2. The appellants are engaged in providing services of renting of immovable property. Renting of immovable property is chargeable to service tax under the provisions of Section 65(90a) of the Finance Act. The appellants are paying appropriate service tax in respect of rent received from the tenants. Show-cause notices were issued to the appellants on the ground that the appellants had received certain amounts as reimbursement of electricity charges from the tenants. Show-cause notices were issued invoked the provisions of Rule 5 of Service Tax (Determination of Value) Rules, 2006 which provides if there are expenditure or costs are incurred by the service provider in the course of providing taxable service, all such expenditure or costs shall be treated as consideration for the taxable service provided or to be provided and shall be included in the value for the purpose of charging service tax.

 

3. The adjudicating authority confirmed the demand by adding the amounts which are as reimbursement of electricity charges from the tenants in the assessable value for the purpose of service tax as provider of renting of immovable property.

 

4. The contention of the appellants is that as per the Lease Agreement, tenants are to pay the actual electricity expenses to the MSEB. In some cases when the tenants default in payment of electricity charges, the appellants will pay from their own pocket and subsequently recover the electricity charges from their tenants. In cases where the tenants paid the electricity charges late to the appellants, the appellants also charging nominal interest on such amount. In some cases, the appellants are having one main meter in respect of electricity supply and the appellants are providing sub meters to the tenants and as per the reading of sub meters the appellants have collected the electricity charges and are paying to the State Electricity Board. In the case of M/s. Vansum Industries , the appellants are also supplying electricity from the generator set when there was failure of power supply from the Electricity Board and in such cases the appellants were charging on commercial rate.

 

5. The contention of the appellants is that the charges in respect of electricity which were recovered on actual basis are nothing to do with the service of renting of immovable property. The charges are to be paid by the tenants directly to the Electricity Board or where the electricity is supplied by the appellants the tenants are to pay on actual consumption. The back up is available where the tenants opted to avail such facility provided by the landlord.

6. The contention of the appellants is that in the case of M/s. Panchshil Tech Park Pvt. Ltd. the adjudicating authority has dropped the proceedings initiated which were on the same ground vide Order-in-Original No.22-23-24/P.III/ST/ Commr /2011-12 dated 28.11.2011 by the Commissioner of Central Excise, Pune.III . The appellants also received information under the RTI Act that the Revenue has accepted that order. The appellants relied upon the Pune III Commissionerate communication dated 26.09.2012. The appellants are also situated in the same Commissionerate . The appellants also submitted that the electricity being goods, supply of electricity does not amount to service. Under the Central Excise Tariff Act, electricity is covered under Chapter 27 of the Tariff and under the Maharashtra Value Added Tax Act, 2002, electricity is chargeable to Nil rate of tax as per Schedule A 20 to the Act. Hence the charges which are on actual basis recovered from the tenants towards the electricity charges and paid to the Electricity Board or retained by the appellants as the appellants were providing back up by way of providing generator set cannot be added to the assessable value for the purpose of service tax as provider of renting of immovable property service. Appellant also relied upon the provisions of Notification No.12/03 ST dated 20.6.2003 to submit that value of goods sold by service provider to service recipient is exempted from service tax. Appellants have not availed any credit in respect of goods sold i.e. electricity.

 

7. Revenue reiterated the findings of the lower authorities and submitted that the appellants are liable to pay service tax on the gross amounts as the appellants were receiving the amounts for consumption of electricity by the tenants and these amounts are part of renting of immovable property. Hence the appellants have to pay service tax on such amounts also as provider of immovable property service. The appellants are providing bunch of services such as renting of immovable property, maintenance and repair services and provides electricity. The main activity of the appellants is renting of immovable property. Hence all the considerations received in respect of renting of immovable property including electricity charges are chargeable to service tax as provider of renting of immovable property. The Revenue also submitted that as per the Lease Agreement, the landlord has to provide electricity load to the tenants and the appellants also undertook to 100% generator back up and the tenants have to pay to the landlord a specific amount to be deposited to the appellants account in respect of such facility. In view of this, the demands are rightly made.

 

8. We find that the appellants are engaged in renting of immovable property and paying service tax. Show-cause notices were issued on the ground that the appellants were receiving certain amounts of reimbursement of charges from their clients while renting of immovable properties. Therefore, such charges are to be added to the assessable value for the purpose of service tax as provider of renting of immovable properties.

 

9. We have gone through the Lease Agreements. As per the terms and conditions of the Lease Agreements, the tenants have to pay electricity charges directly to the MSEB and the appellants are also providing electricity through generator set in case there is a power failure and the appellants are charging for the same. We find that electricity is specifically covered under Tariff Heading 27 of the Central Excise Tariff Act. We find that as per the provisions of Maharashtra Value Added Tax Act, 2002, electricity is also covered under Schedule A sr.no.20 and charged to Nil rate of tax. In view of this, we find the electricity is goods chargeable to duty under Central Excise Tariff as well as under the Maharashtra Value Added Tax Act, 2002. Therefore, the supply of electricity to tenant amounts to sale of goods and not supply of service. Further the Notification No.12/03 ST dated 20/6/2003 exempt from service tax, any value of goods supplied by service provider to service recipient. Further we find that the Commissioner of Central Excise Pune.III vide Order-in-Original dated 28.11.2011 relied upon by the appellants dropped the proceedings which were initiated on the same ground in the case of M/s. Panchshil Tech Park Ltd. The Commissioner of Central Excise in the adjudication order held that electricity is goods and chargeable to Nil excise duty. The decision of the adjudicating authority is accepted by the Revenue as per the communication dated 26.9.2012 by the Commissioner of Central Excise, Pune.III . The present appellants are also under the jurisdiction of Pune III Commissionerate .

 

10. In view of the above discussion, we find merit in the contention of the appellants that the electricity charges collected from the tenants cannot be formed part of the assessable value for the purpose of service tax as provider of renting of immovable properties.

 

11. Impugned orders are set aside and the appeals are allowed.

 

Source: TIOL 

SEZ - Service Tax New Refund Procedure _ 2013

NOTIFICATION NO

12/2013-ST., Dated: July 1, 2013

In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Act) read with sub-section 3 of section 95 of Finance (No.2), Act, 2004 (23 of 2004) and sub-section 3 of section 140 of the Finance Act, 2007 (22 of 2007) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 40/2012-Service Tax, dated the 20th June, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 482 (E), dated the 20th June, 2012, except as respects things done or omitted to be done before such supersession, the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the services on which service tax is leviable under section 66B of the said Act, received by a unit located in a Special Economic Zone (hereinafter referred to as SEZ Unit) or Developer of SEZ ( hereinafter referred to as the Developer) and used for the authorised operation from the whole of the service tax, education cess, and secondary and higher education cess leviable thereon.

2. The exemption shall be provided by way of refund of service tax paid on the specified services received by the SEZ Unit or the Developer and used for the authorised operations:

Provided that where the specified services received by the SEZ Unit or the Developer are used exclusively for the authorised operations, the person liable to pay service tax has the option not to pay the service tax ab initio, subject to the conditions and procedure as stated below .

3. This exemption shall be given effect to in the following manner:

(I) The SEZ Unit or the Developer shall get an approval by the Approval Committee of the list of the services as are required for the authorised operations (referred to as the ‘specified services' elsewhere in the notification) on which the SEZ Unit or Developer wish to claim exemption from service tax.

(II) The ab-initio exemption on the specified services received by the SEZ Unit or the Developer and used exclusively for the authorised operation shall be allowed subject to the following procedure and conditions, namely:-

(a) the SEZ Unit or the Developer shall furnish a declaration in Form A-1, verified by the Specified Officer of the SEZ, along with the list of specified services in terms of condition (I);

(b) on the basis of declaration made in Form A-1, an authorisation shall be issued by the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be to the SEZ Unit or the Developer, in Form A-2;

(c) the SEZ Unit or the Developer shall provide a copy of said authorisation to the provider of specified services. On the basis of the said authorisation, the service provider shall provide the specified services to the SEZ Unit or the Developer without payment of service tax;

(d) the SEZ Unit or the Developer shall furnish to the jurisdictional Superintendent of Central Excise a quarterly statement, in Form A-3, furnishing the details of specified services received by it without payment of service tax;

(e) the SEZ Unit or the Developer shall furnish an undertaking, in Form A-1, that in case the specified services on which exemption has been claimed are not exclusively used for authorised operation or were found not to have been used exclusively for authorised operation, it shall pay to the government an amount that is claimed by way of exemption from service tax and cesses along with interest as applicable on delayed payment of service tax under the provisions of the said Act read with the rules made thereunder.

(III) The refund of service tax on (i) the specified services that are not exclusively used for authorised operation, or (ii) the specified services on which ab-initio exemption is admissible but not claimed, shall be allowed subject to the following procedure and conditions, namely:-

(a) the service tax paid on the specified services that are common to the authorised operation in an SEZ and the operation in domestic tariff area [DTA unit(s)] shall be distributed amongst the SEZ Unit or the Developer and the DTA unit (s) in the manner as prescribed in rule 7 of the Cenvat Credit Rules. For the purpose of distribution, the turnover of the SEZ Unit or the Developer shall be taken as the turnover of authorised operation during the relevant period.

(b) the SEZ Unit or the Developer shall be entitled to refund of the service tax paid on (i) the specified services on which ab-initio exemption is admissible but not claimed, and (ii) the amount distributed to it in terms of clause (a).

(c) the SEZ Unit or Developer who is registered as an assessee under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder, or the said Act or the rules made thereunder, shall file the claim for refund to the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, the as the case may be, in Form A-4;

(d) the amount indicated in the invoice, bill or, as the case may be, challan, on the basis of which this refund is being claimed, including the service tax payable thereon shall have been paid to the person liable to pay the service tax thereon, or as the case may be, the amount of service tax payable under reverse charge shall have been paid under the provisions of the said Act;

(e) the claim for refund shall be filed within one year from the end of the month in which actual payment of service tax was made by such Developer or SEZ Unit to the registered service provider or such extended period as the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, shall permit;

(f) the SEZ Unit or the Developer shall submit only one claim of refund under this notification for every quarter:

Explanation.- For the purposes of this notification “quarter” means a period of three consecutive months with the first quarter beginning from 1st April of every year, second quarter from 1st July, third quarter from 1st October and fourth quarter from 1st January of every year.

(g) the SEZ Unit or the Developer who is not so registered under the provisions referred to in clause (c), shall, before filing a claim for refund under this notification, make an application for registration under rule 4 of the Service Tax Rules, 1994.

(h) if there are more than one SEZ Unit registered under a common service tax registration, a common refund may be filed at the option of the assessee.

(IV) The SEZ Unit or Developer, who intends to avail exemption or refund under this notification, shall maintain proper account of receipt and use of the specified services, on which exemption or refund is claimed, for authorised operations in the SEZ.

4. Where any sum of service tax paid on specified services is erroneously refunded for any reason whatsoever, such service tax refunded shall be recoverable under the provisions of the said Act and the rules made there under, as if it is recovery of service tax erroneously refunded;

5. Notwithstanding anything contained in this notification, SEZ Unit or the Developer shall have the option not to avail of this exemption and instead take CENVAT credit on the specified services in accordance with the CENVAT Credit Rules, 2004.

6. Words and expressions used in this notification and defined in the Special Economic Zones Act, 2005 (28 of 2005) or the rules made thereunder, or the said Act, or the rules made there under shall apply, so far as may be, in relation to refund of service tax under this notification as they apply in relation to a SEZ.

7. This notification shall come into force on the date of its publication in the Gazette of India

FORM A-1
[Refer condition at S. No. 3 (II)(a)]

Declaration by the SEZ Unit or Developer for availing ab initio exemption under notification No.12/2013- Service Tax dated 1 st July, 2013

1. Name of the SEZ Unit/Developer:

2. Addresses with telephone and Email:

3. Permanent Account Number (PAN) of the SEZ Unit/Developer:

4. Import and Export Code Number:

5. Jurisdictional Central Excise/Service Tax Division:

6. Service Tax registration number/Service Tax code/ Central Excise registration number:

7. Declaration: I/We hereby declare that-

(i) The information given in this application form is true, correct and complete in every respect and I am authorised to sign on behalf of the SEZ Unit/Developer;

(ii) I/We maintain proper account of specified services, as approved by the Approval Committee of SEZ, received and used for authorised operations in SEZ; I/we shall make available such accounts and related records, at all reasonable times, to the jurisdictional Central Excise officers for inspection or scrutiny.

(iii) I/We shall use/have used specified services for authorised operations in the SEZ.

(iv)I/We declare that we do not own or carry on any business other than the operations in SEZ [where this item is not applicable, declaration may be submitted after striking out the inapplicable portion];

OR

I/We declare that we also own/ carry on any business in domestic tariff area as per the details furnished below:

Table I

S. No.	Name of the unit owned in DTA	Output services provided by DTA Unit	Goods manufactured by the DTA unit

(v)I/We are aware that the declaration is valid only for the purpose specified in notification 12/2013-Service Tax dated 1st July, 2013 and is subject to fulfillment of conditions.

(vi) I/We intend to claim ab initio exemption on the specified services mentioned in the following Table:

Table II

Sl.No.	Specified service(s) to be received for the authorised operation	Details of service provider(s) who provide(s) the specified service(s), for SEZ authorised operations
		Name and address	Service Tax registration No./(“self” in case of service on which service tax is paid on reverse charge)
(1)	(2)	(3)	(4)

(vii) I/We undertake that in case the services on which exemption has been claimed were not exclusively used for authorised operation or were found not to have been used exclusively for authorised operation, we shall pay to the government an amount that is claimed by way of exemption from service tax along with interest as applicable on delayed payment of service tax under the provisions of the said Act read with the rules made thereunder.

Signature and name of authorised person with stamp

Date:

Place:

I have verified the above declaration; it is correct

Signature, date and stamp of the Specified Officer of the SEZ Unit /Developer (Specified Officer shall retain a copy of the verified declaration, for the purpose of record)

FORM A-2
[Refer condition at S. No. 3 (II)(b)]

Authorisation for procurement of services by a SEZ Unit/Developer for authorised operations under notification No.12/2013- Service Tax dated 1 st July, 2013

A: Details of SEZ Unit/Developer:

1. Name of the SEZ Unit/Developer:

2. Address of the SEZ Unit/Developer with telephone and email:

3. Permanent Account Number (PAN) of the SEZ Unit/Developer:

4. Import and Export Code Number:

5. Jurisdictional Central Excise/Service Tax Division:

6. Service Tax registration number / Service Tax Code/Central Excise registration number:

B: The details of specified services that the SEZ Unit/Developer is authorised to procure in terms of declaration furnished by the SEZ Unit/Developer

Sl.No.	Specified service(s) to be received for the authorised operation	Details of service provider(s) who provide(s) the specified service(s), for SEZ authorised operations
		Name and address	Service Tax registration No.
(1)	(2)	(3)	(4)

(Signature and the stamp of the jurisdictional Deputy Commissioner of Central Excise /Assistant Commissioner of Central Excise)

Phone No:

Fax No.:

FORM A-3[Refer condition at S. No. 3 (II)(d)]

Quarterly return to be furnished by the SEZ Unit/Developer furnishing the details of services procured without payment of service tax in terms of the notification No. 12/2013-Service Tax dated 1st July, 2013

For the Quarter: April-June/Jul-Sep/Oct-Dec/Jan-March Year:

[Tick the appropriate quarter]

1. Name of the SEZ Unit/Developer:

2. Address of the SEZ Unit/Developer with telephone and email:

3. Permanent Account Number (PAN) of the SEZ Unit/Developer:

4. Import and Export Code Number:

5. Jurisdictional Central Excise/Service Tax Division:

6. Service Tax Registration Number / Service Tax Code / Central Excise registration number:

7. We have procured the services as per the details below without payment of service tax in terms of notification No. 12/2013-Service Tax dated 1 st July, 2013

TABLE

S. No.	Description of taxable service	Name and address of service provider	Registration of service provider	Invoice No.	Date	Value of service	Service tax + cess amount claimed as exemption
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)

Signature and name of authorised person with stamp

Date:

Place:

FORM A-4[Refer condition at S. No. 3 (III)(c)]

Application for claiming refund of service tax paid on specified services used for authorised operations in SEZ under notification No.12/2013- Service Tax dated 1 st July, 2013

ToThe Assistant/Deputy Commissioner of Central Excise/Service Tax _________ Division, _______ Commissionerate

Sir ,

I /We having details as below,-

(i) Name of the SEZ Unit/Developer:

(ii) Address of the SEZ Unit/Developer with telephone and email:

(iii) Address of the registered/Head Office with telephone and email:

(iv) Permanent Account Number (PAN) of the SEZ Unit/Developer:

(v) Import and Export Code Number:

(vi) Jurisdictional Central Excise/Service Tax Division:

(vii) Service Tax Registration Number/Service Tax Code / Central Excise registration number :

(viii) Information regarding Bank Account (Bank, address of branch, account number) in which refund amount should be credited/to be deposited:

(ix) Details regarding service tax refund claimed:

claim refund of Rs.................. (Rupees in words) as per the details furnished in the Table I and Table II below for the period from____________ to______________.

(A) Refund of service tax in respect of service tax paid on specified services exclusively used for the authorised operations in SEZ, as approved by the Approval Committee of the _________ SEZ [ Rupees____________] as per the details below

Table-I

S. No.	Description of taxable service	Name and address of service provider	STC No. of service provider (Indicate “ self” if reverse charge applies to the specified service)	Invoice* No.	Date	Value of service	Service tax +cesses paid
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
	Total amount claimed as refund

*Certified copies of documents are enclosed.

(B) Refund on respect of service tax paid on specified services other than the services used exclusively for authorised operation (used partially for the authorised operations of SEZ Unit/Developer), as approved by the Approval Committee of the _________ SEZ [Rupees ____________].

Table-II

S. No.	Description of taxable service	Name and address of service provider	STC No. of service provider	Invoice* No.	Date	Value of service	Service tax + cess Amt	Amount distributed to the SEZ Unit/Developer out of the amount mentioned at column No. (8)	Document* under which amount mentioned at column (9) was distributed to the SEZ Unit/Developer
								(Claimed as refund)	No.	Date
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)
	Total Amount

*Certified copies of documents are enclosed

2. (i) The turnover of the authorised operation of the SEZ Unit/Developer in the previous financial year:____________________;

(ii) Turnover of the DTA operations in the previous financial year:____________

3. I/We Declare that-

(i) information given in this application for refund is true, correct and complete in every respect and that I am authorised to sign this application for refund of service tax;

(ii) the specified services, as approved by the Approval Committee of SEZ, on which exemption/refund is claimed are actually used for the authorised operations in SEZ;

(iii) we have paid the service tax amount along with the cesses, being claimed as refund vide this application, to the service provider;

(iv) refund of service tax has not been claimed or received earlier, on the basis of above documents/information;

(v) we have not taken any CENVAT credit under the CENVAT Credit Rules, 2004 of the amount being claimed as refund;

(vi) proper account of receipt and use of the specified services on which exemption/refund is claimed, for the authorised operations in the SEZ, is maintained and the same shall be produced to the officer sanctioning refund, on demand.

Signature and name (of proprietor/managing partner/person authorised by managing director of the SEZ Unit/Developer) with complete address, telephone and e-mail.

Date: Place:

[F.No. B1/6/ 2013-TRU]

Service Tax can’t be demanded from service provider in case of reverse charge

[2013] 31 taxmann.com 168 (Ahmedabad - CESTAT)

CESTAT, AHMEDABAD BENCH

Commissioner of Service Tax, Ahmedabad v. Landmark Automobiles (P.) Ltd.

 

Section 65(105)(zl) of the Finance Act, 1994, read with rule 2(1)(d) of the Service Tax Rules, 1994 - Insurance Auxiliary Services - Assessee, an insurance agent, received commission from general insurance company - Department demanded service tax thereon - Assessee argued that his services were covered under reverse charge under rule 2(1)(d)(ii) and insurance company was person liable to pay service tax - Department asked assessee to furnish certificate of discharge of service tax liability from general insurance company -

 

HELD : Defence put up by assessee was correct inasmuch as rule 2(1)(d)(ii) clearly casts responsibility on general insurance company to discharge service tax liability on commission paid by them to their agent - Said defence is enough for assessee to state that amount received by them has already been taxed by Government in hands of insurance company - Hence, department's appeal was liable to be dismissed [Paras 4 & 5] [In favour of assessee]

ORDER
 

1. This appeal is filed by the Revenue against order in appeal No. 116/2011 (STC)/K. ANPAZHAKAN/Commr.(A)/Ahd, dt.24-05.201l vide which the first appellate authority has set aside the demands of service tax liability with interest and penalties imposed by the adjudicating authority on the respondent.

 

2. Heard both sides and perused the records.

 

3. The issue involved in this case is regarding the discharge of service tax on the ground of commission received by the respondent from M/s. IFFCO-TOKIO General Insurance Company Lid. The said commission has been given by M/s. IFFCO-TOK1O General Insurance Company Ltd. to the respondent as a licensed agent. The first appellate authority has held that as per the provisions of rule 2(l)(d)(ii) of the Service Tax Rules, 1994 the respondent need not discharge the service tax liability and discharging of the service tax liability is casted on the insurance company. The first appellate authority has relied upon the certificate given by M/s. IFFCO-TOKIO General Insurance Company Ltd. to that effect. In the grounds of appeal, Revenue has said that the certificate which has been produced by the respondent before the first appellate authority does not clarify the period to which service tax has been claimed to have been paid by the M/s. IFFCO-TOKIO General Insurance Company Ltd., and the first appellate authority has not verified the payment particulars made by the insurance company corresponding/relating to certificate in question and hence the order in appeal is bad in law and needs to be set aside.

 

4. After considering the submissions made at length by both sides and perusal of the records, I find that there is no dispute to the fact that the respondent M/s. Landmark Automobiles Pvt. Ltd. is licensed agent of M/s. IFFCO-TOKIO General Insurance Company Ltd. It is also undisputed that the demand of the service tax is raised on the commission received by them as a licensed agent from the said M/s. IFFCO-TOKIO General Insurance Company Ltd. I find that the defence put up by the respondent before the^: lower authorities is correct inasmuch as the provisions of rule 2(1)(d)(ii) of the Service Tax Rules, 1994 clearly casts responsibility on the^: insurance company to discharge the service tax liability on the commission paid by them to their licensed agent. In the current case, that defence is enough for the respondent herein to state that the amount received by them from M/s. IFFCO-TOKIO General Insurance Company Ltd. has already been taxed by the government in the hands of the insurance company. I find that the first appellate authority was correct in allowing the appeal filed by the respondent.

 

5. In my considered view, the impugned order is correct, legal and does not suffer from any infirmity. The impugned order is upheld and the appeal is rejected.