CESTAT upholds refund to assessee, a company incorporated outside India, of service tax erroneously collected by Department of Posts (DoP) in respect of provision of ‘money transfer services’; Notes that, assessee entered into a Representative Agreement with Post & Telegraph Department (P&T) of India under which P&T was obliged to transfer money to designated nominee located in India on assessee’s behalf and P&T paid service tax and collected same from assessee for such service;
Rejects Revenue’s contention that there is no ‘export of service’ as DoP has made payment to recipient in India on basis of instructions from assessee, hence service is performed in India and is appropriately classifiable under category of ‘Business Auxiliary Service’ (BAS); Relies upon co-ordinate bench ruling in Wall Street Finance Ltd., states that ‘place of provision of service’ in case of BAS is determined by location of service recipient, and since recipient of service in instant case is ‘foreign based entity’, same constitutes ‘export of service’; Also, accepts assessee’s contention that refund is not hit by doctrine of unjust enrichment as incidence of tax has not been passed to their customer or any other person, and that said concept is inapplicable for ‘export of service’: CESTAT
Citation: [TS-40-CESTAT-2018-ST]