Taxability of Foreign Exhibition Services: CESTAT Rules No Service Tax Payable on Services Performed Abroad [Read Order]
The tribunal noted that the appellate authority had erred in mixing up the two services.
![Taxability of Foreign Exhibition Services: CESTAT Rules No Service Tax Payable on Services Performed Abroad [Read Order]](https://images.taxscan.in/h-upload/2025/07/09/2061896-service-tax-abroad.webp "Taxability of Foreign Exhibition Services: CESTAT Rules No Service Tax Payable on Services Performed Abroad [Read Order]")
The Chandigarh Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that foreign exhibition services performed outside India are not liable to service tax. Sarup Industries Ltd,appellant-assessee,, was engaged in manufacturing and exporting footwear. During an audit, it was found that in FY 2005-06 and 2006-07, it had paid ₹5,72,027 in foreign...
The Chandigarh Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that foreign exhibition services performed outside India are not liable to service tax.
Sarup Industries Ltd,appellant-assessee,, was engaged in manufacturing and exporting footwear. During an audit, it was found that in FY 2005-06 and 2006-07, it had paid ₹5,72,027 in foreign currency to overseas entities for advertisement and exhibition services related to its business in India.
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The department treated these services as taxable under ‘Business Auxiliary Service’ and ‘Business Exhibition Service’ and issued a show cause notice on 22.03.2011, demanding ₹66,566 in service tax under reverse charge for the period November 2005 to January 2007, along with interest and penalties.
The original authority dropped ₹17,258 for the period before 18.04.2006 but confirmed ₹49,307 under ‘Business Exhibition Service’, along with interest and penalties. The Commissioner (Appeals) upheld this decision, leading to the present appeal.
The assessee counsel argued that the impugned order was not valid and should be set aside, as it was passed without properly considering the facts. He clarified that the issue was about the taxability of 'Business Exhibition Service' received outside India, not services from foreign commission agents.
He pointed out that the original authority had already dropped the demand related to commission agents, as it was for a period before Section 66A came into effect on 18.04.2006. The remaining demand, from April 2006 to January 2007, only related to exhibition services.
He stated that as per the Circular dated 19.04.2006 and service tax rules, such services could be taxed only if performed in India. Since the services were carried out outside India, no tax was applicable.
He relied on tribunal decisions in K.G. Denim Ltd. and Intas Pharmaceuticals Ltd., which had decided similar issues in favour of the taxpayer.
The departmental representative supported the impugned order.
The two member bench comprising S.S Garg (Judicial Member) and P.Anjani Kumar ( Technical Member) noted that the Commissioner (Appeals) had wrongly treated the case as involving both ‘Business Exhibition Service’ and ‘Commission Agent Service’. It clarified that the demand for commission services had already been dropped, and the only issue was the taxability of ‘Business Exhibition Service’.
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It observed that as per Rule 3(ii) of the relevant service tax rules, such services were taxable only if performed in India. Since the exhibition services were carried out entirely outside India, no service tax was payable.
The appellate tribunal also found that the case was covered by earlier decisions where similar services performed abroad were held non-taxable.
It held that the impugned order was not legally sustainable, set it aside, and allowed the appeal.
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