CSIR-IICT Providing Data to Private Entity as per Govt. Order Not Taxable under Scientific and Technical Consultancy Service: CESTAT [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad Bench, held that the Indian Institute of Chemical Technology’s (IICT) provision of data to private entities in accordance with a Government order, without rendering any consultation or advice, is not taxable under Scientific and Technical Consultancy Service.

The appellant, Indian Institute of Chemical Technology (IICT), is a constituent of the Council of Scientific and Industrial Research (CSIR), functioning under the Ministry of Science and Technology.

Appellant provides various scientific and technical research activities utilizing their scientists and technical experts in their specialized area.

The respondent observed that the appellant was paying service tax under the category of ‘Scientific & Technical Consultancy Service’ (STCS) in respect of certain categories (i) Collaborative Projects (CLP), (ii) Consultancy Projects (CNP), (iii) Sponsored Projects, (iv) Technical Consultancy Projects. However, the appellant had not been paid any service tax on Grants-in-Aid Projects (GAP).

The Revenue Department, categorised the Grants-in-Aid projects into four categories and included Public-Private-Partnership (PPP) Projects and confirmed the demand of service tax on such projects along with penalty.

The counsel of the appellant, Joseph Dominic, submitted that all the money received by the appellant were pursuant to the Government orders conveying sanctioning of grant amount and intended use.

It was submitted that a portion of the funding was received directly from the Government, while the remaining portion was contributed by private entities in terms of the Government order.

It was further contended that although certain data generated during the course of the project were provided to the private entities, no advice or technical opinion was given on such data.

The revenue department represented by Raji Reddy, has reiterated the findings of the Adjudicating Authority.

Angad Prasad, judicial member and A.K. Jyothishi, Technical member, observed that there is no specific evidence to suggest that any advice or opinion has been given by the appellant to those private entities in relation to the said project, which has been provided to them under the Government’s order/notification allocating the specified project.

The tribunal observed that in the case of Halliburton Offshore Services Inc., Vs CST, it has been held that merely providing data for consideration cannot be treated as provision of service under STCS. Accordingly, the tribunal set aside the commissioner’s order.

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