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Whether verification of address of client for the bank by Chartered Accountant (CA) is covered under the Business Auxiliary Services (BAS) as u/s.65(19) of Finance Act, 1994.
Facts
The appellant was a CA and was paying service tax on the fees received by him as Chartered Accountant. The dispute arose as regards the services rendered by the CA to M/s. HDFC for contact-point verification of residence and offices of the clients of the banks.
The Revenue held that the aforementioned services were covered under the Business Auxiliary service and accordingly confirmed the service tax demand of Rs.1,78,479 along with interest and penalty. The appellant referred to the agreement entered into by the appellant with M/s. HDFC for providing services of contact-point verification of residence and offices and any other services as per the set guidelines and formats set by the bank from time to time. The appellant also drew attention to the definition of BAS u/s.65(19) of the Finance Act which relates to the services in relation to promotion of marketing of services provided by the client.
Held
The Tribunal observed that the verification of the addresses given by the client cannot be considered to be a service similar to promoting or marketing the services of the bank or evaluating their prospective customers. Accordingly, it was held that the services provided by the appellant were not considered Business Auxiliary Service.
