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Marketing/Support services on P2P basis to group companies is Export of Services

  • 15 Apr 2021
  • 163

CSG Systems International (India) (P.) Ltd. v. Commissioner of Central Tax, Bengaluru - [2021] 126 taxmann.com 139 (Bangalore - CESTAT)

The appellant was providing taxable services filed for refund of unutilized CENVAT credit of service tax availed on the input services used for providing output services to its foreign group companies. The refund was rejected on the ground that as Rule 3 of the Provision of Service Rules, 2012, the sales, marketing and administrative services would be classified as BAS services provided in India and the same cannot be treated as export of service. The appellant filed appeal before the Commissioner (Appeals) who rejected the appeal. It filed appeal against CESTAT.


The appellant submitted that BAS services were provided to group companies located outside India and these services provided to group companies located outside India would be treated as export of service. The place of provision for these services would be the place of recipient i.e. group companies located outside India.


The Honorable CESTAT observed that mere rendering of marketing and sales support services on principal to principal basis such as customer identification, market analysis and coordination with the customers for meeting to group companies cannot be construed as arranging provision of intermediary services. Moreover, services rendered by the appellant would satisfy all the conditions prescribed under Rule 6A of the Service Tax Rules, 1994 because the services recipient was located outside India and the place of provision of service was outside India and the consideration was received in convertible foreign exchange. Therefore, it was held that appellant would be entitled to refund of unutilized CENVAT credit.