Service Tax Not Leviable On Business Exhibition Service Performed Outside India: CESTAT

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax is not leviable on business exhibition services performed outside India.

The two-member bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) observed that as per Rule 3 of Sub Rule (II) of the Taxation of Services (Provided from Outside India and Received in India) Rules 2006, a service can be taxable in the hand of the recipient of the service in India only when the part of the service is performed in India.

The tribunal stated that the service provider, i.e., the organiser of exhibitions, is located in countries such as Pakistan, Egypt, Bangkok, and Ukraine and that no part of the service was provided in India. The entire service was provided outside India only. Therefore, the location of service was outside India. The service tax cannot be levied in India.

The appellant/assessee submitted that the service was provided in countries like Pakistan, Egypt, Bangkok, and Ukraine by the service provider of the respective countries. The service provider had provided the service, namely, Business Exhibition Service, outside India only, and the appellant had received the service then and there only, i.e., outside India. Therefore, even if the service was not provided partly in India, the service is not liable to tax in the hands of the appellant.

The assessee contended that the service is not covered as an import of service in terms of the Taxation of Service (Provided from outside India and received in India) Rules, 2006.

The CESTAT has held that the whole of the service was provided outside India and received outside India. Therefore, the service tax is not leviable on the business exhibition service received by the appellant, which was performed outside India.

Case Title: Rama Cylinders Pvt. Ltd. Versus C.C.E. & S.T.

Citation: Service Tax Appeal No. 116 of 2012

Date: 26.09.2022

Counsel For Appellant: Advocate R. Subramanya

Counsel For Respondent: Authorised Representative Tara Prakash

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