By Puloma Dalal, Jayesh Gogri, Chartered Accountants
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Refund of – Service tax paid on marketing services of foreign service provider u/s 66A as Business Auxiliary Services – Whether ‘input service’ – Held ‘yes’.
Facts:
The Appellant provided Customised Software Development services, renting of immovable property services etc. They engaged a company registered in USA to market/sell software services developed by them. For this service, they paid consideration to the foreign service provider and discharged service tax liability on reverse charge u/s. 66A. As these services were used in providing exported software development services, the Appellant being unable to utilise the full CENVAT credit on these input services, filed a refund claim which was rejected. The Appellant contended that for the subsequent period, the department allowed CENVAT credit of service tax paid on marketing services under the category of business auxiliary service and there was no issue in this regard.
Held:
The Hon. Tribunal, after placing reliance on the copy of the agreement with the foreign service provider and on the copy of the order passed by the department allowing the refund claim for the subsequent period, held that, the service so received by the Appellant qualifies as “Business Auxiliary Service” and further held that this was also considered as input service under Rule 2(l) of the CENVAT Credit Rules, 2004 and therefore the credit of service tax paid was admissible and eligible for refund as the appellant was unable to utilise the same.
