The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that an individual NRI cannot be treated as a commercial concern for the purpose of service tax under Business Auxiliary Services under the Finance Act, 1994.
The appellant is a Non-Resident Indian providing service of Commission Agent to Indian Service Recipient i.e. Amway Enterprise in the USA. The department held that the appellant has to pay service tax under the head Business Auxiliary Services.
Before the Tribunal, the appellant contended that the appellant is an NRI and staying in the USA and he does not have office or establishment in India. He provided services of Commission Agent for marketing of goods of Amway Enterprise India in the USA. As per Section 66A in such case, the service tax liability is on Amway Enterprise who have discharged the service tax liability on this service. It was also contended that the demand of service tax was raised under BAS, the appellant being an individual proprietorship concern not considered as a commercial concern.
In support of his contentions, the appellants cited a few decisions rendered by the Tribunal wherein it was held that an individual proprietorship concern not considered as a commercial concern, hence, he is not liable to pay service tax.
Allowing the appeal of the assessee, the Tribunal said that the appellant is an individual NRI in the USA. During the relevant period this Tribunal has given various judgments wherein it was held that an individual and/or proprietorship concern is not considered as a commercial concern, therefore, the service tax under BAS is not payable by such individual.
In the above-cited decisions, it has been decided that an individual or a proprietor or a proprietorship concern cannot be charged service tax under BAS. Considering the above position of law, we set aside the impugned order and allow the appeal.To Read the full text of the Order CLICK HERE