It was cited by the New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) that there is no service tax on the services via the organizer concerning the business exhibition held outside India.
It was noted by The Bench of Dr. Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) that “………the Business Exhibition for which the appellant received services from the foreign agencies, were held outside the taxable territory. Resultantly, the Place of Provision of Services received by the appellant from the foreign service provider shall be outside the territory of India. Accordingly, appellant is not liable to pay service tax even under RCM.”
For the same case, the assessee/appellant is the manufacturer of Optical Fiber and Optical Fibre Cables. The payment has been made by the taxpayer to foreign-based service providers for managing, for acting as process agents, for “Foreign Currency Convertible Bonds” Global Depository Receipts globally/convertible etc.
The department alleged that, in accordance with Rule 3 of the Taxation of Services Rules, 2006, read with Section 66A(1) of the Finance Act, 1994, the taxpayer, as the recipient of services in India, is required to pay tax on the amount paid or remitted to the foreign-based service provider under the Banking and Financial Services category on a Reverse Charge Mechanism basis.
As per that, the show cause notice was been provided to the taxpayer asking for the service tax recovery. The proposal was confirmed initially. The taxpayer has furnished a plea, which was dismissed.
It was provided by the department that the undisputed fact is that the taxpayer has obtained the services from foreign-based service providers. As the taxpayer is in the territory of tax therefore it was obligated to file the service tax under the Reverse Charge Mechanism.
The Tribunal mentioned that “the Mega Exemption Notification No. 25/2012 dated 20th June 2012, clause (31) thereof, also exempts the services by an organizer to any person in respect of a Business Exhibition held outside India. The adjudicating authorities have miserably ignored the exemption notifications.”
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There is a tax obligation from section 66B for all services not covered in the negative list. However, the section itself specifies that any service will not be obligated to tax if it comes under any of the waived notifications. Therefore, the demand for service tax has incorrectly been confirmed, the bench noted.
The tribunal in the aforesaid view has permitted the plea.
| Case Title | Aksh Optifibre Ltd vs. Commissioner of Central Excise & CGST |
| Case Number | Service Tax Appeal No. 50810 of 2019 |
| Date | 13.03.2025 |
| For the Appellant | Ms. Jwaria Kainaat |
| For the Respondent | Shri Aejaz Ahmad |
| New Delhi CESTAT | Read Order |
