Draft Show Trigger Notice
Bass speaker: SERVICE TAX- M/s. Share Network Private Ltd., No . 29, Second Main Highway, Ambattur Industrial Estate, Chennai- 600058.
Recovery of service Tax N ot paid -- Reg.
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M/s. Express Network Private Ltd., No . up to 29, Second Key Road, Ambattur Industrial Real estate, Chennai- 600058(Here after referred as Provider or ENP for short)are registered with Service duty department and the STC Number AAACE6586AST001 Dated 10. 07. 2008 They are really registered pertaining to provision of Advertising Agency, Online Details and repository access or perhaps retrieval solutions and sale for Space or Time for advertising campaign service.
2 . The ENP is usually having their particular website Indiavarta. com that is used for web commerce business. Several products will be displayed with this website for sale. After sale of these products the Service Provider gets commission through the vendors for which service taxes is paid. The Provider is also selling / offering space within their websites to advertisement organizations or direct clients that they are having to pay service duty on the income earned through sale of space or moment for advertisement service.
3. 0During the course of Audit of accounts of the ENP it was noticed that intended for the website viz., Indiavarta. com the assessee paid overseas vendors to get the Web Hosting service provided from abroad. It was pointed out that they have certainly not discharged the service duty liability around the above activity of Online Info and data source access or retrieval providers imported from abroad about payment of Rs. one particular, 41, ninety-seven, 718/- underneath Section 66A of the Finance Act 1994 reverse demand mechanism. The tax the liability works out to Rs. 18, 10, 816/- for the time 2007-08 to 2011-12 as per the Annexure surrounded.
3. 1 ) The provider from in another country is providing devoted servers along with important software intended for security and hosting from the Service Provider's websites, internet applications and database which are taxable assistance for which the service recipient have to pay service tax regarding Taxation of Services (Provided from Outside the house India and Received in India) Rules, 2006 go through with Section 66A of Finance Work, 1994. SECTION 66A of Finance Act1994 reads because below.
" Charge of service tax on companies received via outside India. вЂ” (1) Where any service specific in term (105) of section sixty five is, вЂ” (a) offered or to end up being provided by a person who has established a company or has a fixed institution from which the service can be provided or be offered or features his long lasting address or usual place of residence, in a country other than India, and (b) received by a person (hereinafter called the recipient) who has his place of business, fixed establishment, long term address or usual place of residence, in India, this kind of service shall, for the purposes with this section, be taxable service, and such taxable service should be treated as if the recipient had himself provided the service in India, and accordingly each of the provisions of this Chapter shall apply: three or more. 2 . The number of service tax payable intended for imported solutions for the period 07-08 to 11-12 can be Rs 16, 10, 816/-
4. 0While verifying the total amount Sheet it was noticed that the Service Provider features reported cash flow of Rs. 4, 83, 68, 646/- under various heads like SMS Income, Commission, Salary from repair of library and clipping research services to get the period 2007-08 to 2011-12. It is realized that the assessee has not discharged the Service Tax liability on the previously mentioned income during the period from 2007-08 to 2011-12. 4. 1The assessee earned income through SMS services by providing data to mobile subscriber which is used to deliver News TEXT MESSAGE to the Cellular users. The Service Provider has to pay support tax under Online Data and database access or retrieval services. 4. 2The Service Provider has brought Commission during 2008-09 & 2010-11 for which service tax has to be paid under Bussiness Auxiliary Support. 4. 3The Service Provider is definitely maintaining and running...
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