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April 2015

[2015] 37 STR 642 (Tri.–Mumbai) Wall Street Finance Ltd. vs. Commissioner of Service Tax, Mumbai.

By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
Reading Time 2 mins
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Indian agent, facilitating transfer of money from abroad to persons situated in India, provides services to service receiver outside India though the beneficiary of services is in India.

Facts:
The appellant was engaged by M/s. Western Union as agent for transfer of money from abroad to persons situated in India. The department was of the view that since services were rendered in India, service tax was payable on the commission received.

It was contended that the nature of services undertaken was transfer of money from abroad for the remitters situated abroad through Western Union who provided the money transfer service. As far as usage of service was concerned, services were provided to Western Union, who was situated abroad and therefore, services were used outside India. The consideration was also received in convertible foreign exchange. Hence, all conditions for classifying the said services as export of service were satisfied.

Held:
At the relevant time there were no specific rules to determine the place of provision of service under the Service Tax Law. Rule 3 provided that the place of provision of such service shall be the place of recipient of service. In the present case, since the recipient was M/s. Western Union who was located outside India, services were export services not taxable in India.

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