CESTAT quashes Service Tax Demand on Training of Officers outside India by Foreign Agency [Read Order]

In a recent decision the Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed the service tax demand on training of officers outside India by foreign agency.

The appeal has been filed by Gujarat Gas Limited against demand of service tax.

The Counsel for the appellant pointed out that in the year 2007 they had received services in relation to training provided to the officials of the appellant company outside India by Foreign Firm. A Show Cause Notice was issued to them seeking to payment of service tax under Section 66A(1) of the Finance Act, 1944 read with Notification 36/04-ST dated 31.12.2004 and Rule 2(1)(d)(iv) of the Service Tax Rules 1994.

The Counsel argued that in terms of Taxation of Services (provided from outside India and received in India) Rules 2006 only these services received in India can be taxed on reverse charge basis.

The counsel further pointed out that there was certain demand in respect of training provided to their employees by foreign trainers within India. In respect of the said demand, the appellant has already paid the same along with interest and 25% of penalty within a period received in India) Rules, 2006. The services covered under the said sub-Rule is taxable only when the same are performed in India.”

The Coram comprising Ramesh Nair, Judicial Member and Raju, Technical Member noted that “We find that so far as the demand in respect of training provided by foreign company within India is concerned, the same has been accepted by the appellants and amount of service tax along with interest and 25% penalty has been paid, therefore, the matter stands settled under Section 73(3) of the Finance Act, 1994.”

The Tribunal concluded by noting that “As far as demand of service tax in respect of services received by the appellant in respect of training of officers outside India by a foreign agency is concerned, the issue is squarely covered by the decision of Tribunal in case of M/s Firmenich Aromatics India Pvt Ltd.”

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates