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June 2015

[2015] 56 taxmann.com 259 (Karnataka High Court) – Commissioner of Central Excise & Service Tax vs. Jacobs Engineering UK Ltd.

By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
Reading Time 2 mins
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A foreign company with no business establishment nor operations in India cannot be held liable to service tax on mere visit of its officers in India for providing service.

Facts:
Assessee company is situated in United Kingdom with no office or branch in India. They provided consulting engineering service to an Indian Fertiliser company for period March 1998 to April 2001. Revenue alleged that since officers of respondent company had visited premises of assessee they are liable to service tax. Both the appellate authorities decided against the Revenue, aggrieved by which appeal is filed before High Court.

Held:
The High Court observed that, the Tribunal dismissed the order relying upon Mumbai Bench judgment of Tribunal in case of Philcorp Pte. Ltd. vs. CCE on the ground that the respondent company did not have any office or operations within the Territory of India. The submission made by the revenue that respondent company’s officers had visited the client’s plant in India and thus liable to tax is not accepted by the Court , in view of the fact that, assessee don’t have branch or office within the taxable territory. Thus, the appeal was dismissed as service provider was located outside India with no business operations or office within territory of India.

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