The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed service tax demand and ruled that the income from sale of tender forms, xeroxing, printing, digital software, certificates not business auxiliary services (BAS).
The appellant, Andhra Pradesh Technology Services Ltd, is a government company of the State government formed for the purpose of acting as the nodal agency for the government departments of the State of Andhra Pradesh, in the matters relating to implementation and usage of information technology, under the administrative control of‘Information technology and communication department’ of the state government.
With respect to the demand under Business Auxiliary Service [“BAS”], it is the contention of the appellant that the various Government Departments/Organisations to whom the Appellant had provided services are not engaged in any business activities, but are engaged only in various sovereign functions, the activities of the appellant cannot at all be covered under Business Auxiliary Service, in terms of the decision of the Hon’ble Tribunal in the case of UTI Technology Services Ltd. vs CCE.
Further, it was also the submission that it can be seen from the definitions of ‘Business Auxiliary Service’, that “Information technology services” is specifically excluded, during the entire period of demand in the instant case. Thus, the entire demand of Service tax confirmed under BAS is liable to be set aside.
A Two-Member Bench comprising Anil Choudhary, Judicial Member and AK Jyotishi, Technical Member observed that “A perusal of the said categorisation of services would clearly reveal that, the Appellant would only assist the Government Departments/Organisation for availing/procuring various IT related hardware/services, and for such assistance, they collect certain administrative charges. Therefore, the services of the Appellant do not satisfy the definition of ‘commission agent’ so as to bring them under the category of ‘Business Auxiliary Services’.”
“Further, with respect to exemption claim rejected on income such as, sale of tender forms, xeroxing and printing and digital software and certificates, which are not covered under business auxiliary services. This claim was not allowed on the ground that the appellant had not produced any evidence in support of the claim. However, as can be seen, they are identified clearly in the Show Cause Notice itself, therefore, the denial of exemption is incorrect” the Bench concluded.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates
