Export of services-Phrase “used outside India” needs to be interpreted to mean that the benefit of the services should accrue outside India vide CBEC Circular no. 111/5/2009-ST dated 24.2.2009. Export of services-Merely not showing the commission separately in profit and loss account cannot be a ground to reject the claim of the assessee that the services are exported especially when other documentary evidences proving provision of services to foreign client and receipt of amount in foreign cur<

Export of services-Merely not showing the commission separately in profit and loss account cannot be a ground to reject the claim of the assessee that the services are exported especially when other documentary evidences proving provision of services to foreign client and receipt of amount in foreign currency were in place and not rebutted by the department.

The department demanded service tax on differential amount as shown in service tax returns and profit and loss account. The appellant contended that the said amount pertained to export of services and there was no mandatory requirement to show export of services in service tax returns during the relevant period, therefore, the same was not reflected in the service tax returns. Further, the appellant mainly contended that commission was received from foreign clients in foreign currency and the documentary evidences in this respect, was provided to the department. However, the same was not challenged by the department. Further, service tax was demanded without showing any working. Also, non-mention of the foreign commission separately in the profit and loss account was not a valid ground for demand of service tax. The demand was however confirmed as there was no bifurcation of domestic and export commission.

Held:

The ground taken by the Commissioner (Appeals) that the commission was not shown separately in the profit and loss account, cannot be a valid ground to reject the services in view of documentary evidences proving that the commission was received from foreign clients in foreign currency. Further, the appellant had paid service tax on domestic commission which was submitted to the Commissioner (Appeals), therefore, there were no contradictory stands taken by the appellant. Vide Circular no. 111/5/2009-ST dated 24.2.2009, the foreign commission was not liable to service tax since the phrase “used outside India” was required to be interpreted to mean that the benefit of the service should accrue outside India including cases where all the activities pertaining to provision of service were performed in India. 7