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Case of Authority for Advance Rulings, April 17, 2007 (case In Re: Arisaig Partners (India) Pvt. Ltd. Vs)

Document Cited in Precedent Map Related
Vincent
President:P.V. Reddi, J. (Chairman), Chitra Saha and A. Sinha, Members
Defense:Service Tax
Resolution Date:April 17, 2007

Order:

Chitra Saha, Member

  1. The applicant is a wholly owned subsidiary Indian company of A.P. Asia, a foreign company. It is stated that it would be providing among others, investment research and other advisory services. For this purpose, it has entered into an agreement with the holding company for providing services on payment of fees which are claimed to be an arm's length return on total costs over a financial period.

  2. On the aforementioned facts, the applicant has sought an advance ruling of the Authority on the following question:

    Whether investment research and advisory services proposed to be provided by AP India to the overseas entity fulfil the eligibility conditions provided in the Export of Services Rules, 2005 (as amended), which have been introduced by Notification No. 9/2005-S.T., dated March 3, 2006?

    The application was admitted for pronouncement of advance ruling under the provision of Section 96D(2) of the Finance Act, 1994 vide Authority's Order dated 5-12-2006.

  3. The matter was heard again on 11-1-2007, when it was observed by the Authority from annexure-I of the application, that the applicant had commenced providing investment research services to AP Asia on a 'trial run' basis since June, 2005 which continues till date. Prima facie, the matter appeared to relate to an 'on going activity'. The applicant was, therefore, directed vide Authority's Miscellaneous Order No. AAR/02(ST)/2007, dated 11-1-2007 to file an affidavit to explain as to why their activity should not be treated as an 'on going activity'.

    In compliance with the Authority's directions, the applicant filed an affidavit dated 29-1-2007. A copy of the affidavit was sent to the concerned Commissioner who filed comments thereon vide letter dated 2-3-2007.

    When the matter was re-fixed for hearing on 10-4-2007, the applicant vide letter dated 3-4-2007 submitted that a decision be taken on the basis of application dated 6-9-2006 and the submissions made in the hearing on 11-1-2007 and in the affidavit dated 29-1-2007.

  4. On 10-4-2007, none appeared on behalf of the applicant. Shri Deepak Garg, Senior Departmental Representative appeared on behalf of the Commissioner and made his submissions.

  5. In the affidavit dated 29-1-2007, the applicant, inter alia, has stated as under:

    AP India is running a pilot/trial run operation, since June, 2005, with only four employees.

    AP India began its pilot/trial run operations, in June, 2005, with employee strength of two...

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