Case nº Ruling No. AAR/ST/01/2016, in Application No. AAR/44/ST/22/2014 of AAR Cases, January 08, 2016 (case In Re : Creative Problem Solving India Vs)
|Judge:||For Appellant: Shri Sunil Gupta, Advocate and For Respondents: Shri Amresh Jain, Departmental Representative|
|President:||V.S. Sirpurkar, Chairman, Shri S.S. Rana and R.S. Shukla, Members|
|Defense:||Finance Act, 1994 - Section 65|
|Resolution Date:||January 08, 2016|
|Issuing Organization:||AAR Cases|
1. The applicant herein has entered into a Memorandum of Understanding (MoU for short) with one foreign firm IDEAS (i.e. IDEAS Management Consultants, Oman). Under that Memorandum of Understanding (MoU for short), the applicant has agreed to become a Distributor of the books of various nature which will be supplied by IDEAS (i.e. IDEAS Management Consultants, Oman and those books will be sold to the various purchasers in India. The question which has been posed in the application is as to whether the service tax liability will be for an activity described as under:-
"proposed IDEAS Oman will be selling educational books and printed manuals for onward sale to organizations in India via Creative Problem Solving India, Mumbai."
2. Shri Gupta, the learned representative of the applicant stresses on the wording of the proposed activity which is purely a selling activity. From the wording in Column No. 3 of the application, it is clear that the applicant will be purchasing the books from IDEAS (i.e. IDEAS Management Consultants, Oman) and will be further selling them to the Indian entities. There can be no doubt about this proposition, though Shri Jain raises a doubt on the basis of the objection raised by the concerned Commissioner. In our opinion, the concerned Commissioner had not read the application properly.
3. According to Shri Jain, the MoU also covers some other activity for which the payment is required to be made by the applicant to IDEAS. He stresses on Column No. 3 which is as under:-
"Workbooks. To maintain quality controls, Authorized Distributor and will provide each attendee of each client with the approved Workbook/manual and pay IDEAS the charges as agreed separately from time to time."
When a specific query was put to Shri Gupta on this behalf, it was given out that if there is some error somewhere in any book which is pointed out to the Distributor, who is the applicant he shall show that error to the IDEAS Management Consultants, Oman...
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