The assessee provided bed rolls to upper class railway passengers of Southern Railways as per contracts awarded to it by the latter. The Adjudicating Authority held that the activities carried out by the assessee were in the nature of ‘customer care services’ provided on behalf of the railways and would fall within the ambit of ‘business auxiliary service’ as defined under section 65(19).
The Hon’ble CESTAT, Chennai Bench vide final order nos. 41401-41404/2018 dated February 12, 2018 dated stated that activities carried out by assessee would come within scope of ‘customer care services’ provided on behalf of client.
The assessee has sought to argue that it is not providing the service on behalf of a ‘client’. It has contended that client is an individual, corporation, etc. that employs a professional to advise or assist it in the professional line of work. It is only supplying bed rolls involving only laundering and labour work. Hence, it is not a professional or a technical person. There is no merit in this argument. It is not that parameters of every customer care activity involves technical or professional expertise. The assessee has also argued that ‘customer care service provided on behalf of client’ will cover only business transactions, more particularly of goods coupled with services. On sale of goods or services, the customer is having right to ask for technical/professional services for rectification of any deficiency which would alone mean ‘customer care service’. This argument also does not wash. On the other hand, in the present era, there are customer cares which would be required even for services rendered and to say that customer care will be required only in sale of goods is definitely a misconception.
Another argument of the assessee is that no customer care to passengers would be possible, since railway transportation service is a public transport and there is absolutely no personal relationship with these passengers. Hence passengers are not customers of railways and only when repeated dealings are existing, one can be called ‘customer’. The assessee is once again labouring under a misbelief. The Vision Statement and Mission Statement of the Indian Railways indicate that railways are, inter alia, customer focused and to care for customers who are none other than their passengers. The supply of bed rolls to upper class passengers is one such endeavour of the railways to provide customer care to its passengers
In view of the aforesaid, the activities carried out by the assessee will definitely come within the scope of ‘customer care services’ provided on behalf of the client and will be eligible to service tax under ‘business auxiliary service’ as defined under section 65(19). As per the Oxford Dictionary, ‘customer care’ is defined as ‘assistance and support provided by a company to those people who buy or use its products or services’. ‘Customer care service’ is also often explained as ‘provision of service to customers, before, during and after a purchase’, as the process of looking after customers to best ensure their satisfaction with the business and its goods and services.
Citation: [2018] 97 taxmann.com 306 (Chennai – CESTAT)