Relief to Vodafone Idea: CESTAT quashes Service Tax Demand on International Inbound Roaming Charges on Ground of Inclusion of Service Rendered as ‘Export of Service’ [Read Order]

The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted relief to Vodafone Idea by quashing the service tax demand imposed on International inbound roaming charges on the ground of Inclusion of service rendered by the assessee as export of service. 

Vodafone Idea Ltd. (formerly known as 'M/s. Vodafone Cellular Ltd.'), the appellant assessee was engaged in the provision of Telecommunication Services, Business Auxiliary Services, Intellectual Property Services, etc. They are registered with the Service Tax Department and are filing Service Tax returns periodically in terms of Rule 7 of the Service Tax Rules, 1994. 

The assessee appealed against the order passed by the adjudicating authority for confirming the demand of Service Tax imposed on International inbound roaming charges along with interest and imposed penalty. 

ShwethaVasudevan, the counsel for the assessee contended that the service rendered by the assessee was treated as an export of service under Rule 6A of the Service Tax Rules, 1994 because the conditions in Rule 6A(d) of the Service Tax Rules are not satisfied as the place of provision of service was within India. 

Further submitted that the assessee was not liable to pay the service tax and the demand raised by the department was not as per the law and liable to be deleted. 

Also submitted that the assessee had paid Service Tax and filed rebate claims for the Service Tax paid on international inbound roaming services on the ground that the service amounted to the export of services in terms of Rule 5 of the Export of Services Rules, 2005. 

Sridevi Taritia, the counsel for the department relied on the decisions made by the lower authorities and contended that the demand of service tax raised by the department on the international roaming charges was as per the law and liable to be sustained. 

The Bench observed that the services rendered by the assessee are not eligible to service tax being export of service. 

The two-member bench comprising Sulekha Beevi (Judicial) and Sanjiv Srivastava (Technical) quashed the demand for service tax while allowing the appeal filed by the assessee. 

To Read the full text of the Order CLICK HERE

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