Whether the sale of goods in India belonging to associate situated abroad to be treated as export service or an intermediary service thereby taxable in India
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Whether the sale of goods in India belonging to associate situated abroad to be treated as export service or an intermediary service thereby taxable in India
CRODA INDIA COMPANY PVT LTD Vs COMMISSIONER OF SERVICE TAX
PETITIONER: Croda India Company Pvt Ltd
RESPONDENT: Commissioner of service tax
FACTS:
The petitioner is engaged in providing various taxable services whereby one among them is the sale of goods in India belonging to its associates situated abroad. Since sale of goods has taken place in India, revenue intends to charge service tax by categorizing it as intermediary service for sale of goods. Whereas the petitioner intends to consider it as export of service provided to its associates.
HELD:
Although the recipient of service is located outside India but as per the definition of export of service, one of the conditions is that service must “used outside India” and not “beneficiary of service outside India”. In the present case, the recipient is benefited from services used in India by selling goods in India, thereby considering such transactions to be intermediary services for supply of goods and not the export of services. Thus, the petitioner is liable to pay taxes.
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