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July 2015

[2015-TIOL-1085-CESTAT-MUM] Commissioner of Service Tax, Mumbai-ii vs. Syntel Sterling Bestshores Solutions Pvt. Ltd

By Puloma Dalal
Jayesh Gogri
Mandar Telang Chartered Accountants
Reading Time 1 mins
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Input services without which the quality and efficiency of output services exported cannot be achieved are eligible for refund.

Facts:
The
Respondent is a BPO rendering services to the clients based abroad. A
refund claim was filed in respect of service tax paid on rent-a-cab
service, telephone service and rent. Adjudicating authority denied the
claim. On appeal, the first appellate authority allowed the refund
claim, aggrieved by which revenue is in appeal.

Held:
The
Tribunal relied upon the CBEC’s Circular No. 120/01/2010-ST dated
19/01/2010 which specifically provides that essential services used by
Call Centres for provision of their output service would qualify as
input services eligible for taking CENVAT credit as well as refund. It
further held that the expression ‘used in’ in the CENVAT Credit Rules
should be interpreted in a harmonious manner and accordingly as the
input services disallowed were essential to provide quality output
services, the refund should be granted.

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