Recipient of Services located outside India - Money received in convertible foreign exchange - fact that advice resulted in investment in India not relevant.

Commissioner of Service Tax, Mumbai-I v/s N.V. Advisory Pvt. Ltd. [2015 (39) STR 210 -Mumbai)  

Recipient of Services located outside India - Money received in convertible foreign exchange - fact that advice resulted in investment in India not relevant.

FACTS:

The Respondent is providing services in the nature, of advice on investment opportunities

and is also providing back office operation support to the firms situated outside India. The payments are received in convertible foreign exchange. A refund claim was filed in respect of service tax paid on the input services used and consumed by them in the course of providing output services which were exported. The Adjudicating Authority rejected the claim. The Commissioner (Appeals) allowed the refund claim citing the CBEC Circular No. 111/5/2009-ST dated 24/02/2009  clarifying the term "used outside India" to mean that the benefit of the service accrues outside India. Therefore, revenue has preferred the present Appeal

HELD:

The Tribunal held that Rule 3(i)(iii) and Rule 3(2) of the Export of Services Rules, 2005 is satisfied as the recipient is located outside India and the payment is received in convertible  foreign  exchange.  Relying on the Larger Bench decision of Paul Merchants Ltd vs. Commissioner of Central Excise, Chandigarh [2013(29) STR 257 (Tri. Del) the Tribunal allowed the refund claim. Accordingly, the plea of the revenue that the services were used for making investment in India and therefore  cannot  be treated as export, was dismissed. Further in the matter of back  office  support  operations,  relying  upon the decision of Commissioner of Central Excise, Hyderabad vs. Deloitte Tax Services India Pvt. Ltd [2008 (11) STR 266 (Tri.-Bang)] the Tribunal held that since the client was situated outside India, it is an export of service.