Market Support Services to Foreign Entity Treated as Export: CESTAT

Case Details: Microsot Corporation (India) Pvt. Ltd. Versus Commissioner of Service Tax, Delhi (2025) 34 Centax 60 (Tri.-Chan) 

Judiciary and Counsel Details

• S/Shri S.S. Garg & P. Anjani Kumar, Member
• Shri Prasad Paranjape, Adv. for the Appellant
• Shri Ajay Jain, Authorised Representative for the Respondent

Facts of the Case

The appellant-assessee rendered market support services to a foreign entity on a cost-plus basis concerning the sale of its products in India through independent third-party distributors. The assessee was not engaged in the direct sale of these products in India. The appellant submitted that such services were in the nature of business auxiliary services and should be treated as export of services. Reliance was placed on CESTAT decisions in the assessee’s own cases reported in 2014 (36) S.T.R. 766 (Tri.-Del) and 2018 (18) G.S.T.L. 465 (Tri.-Chan), which recognized similar services rendered to foreign entities as exports. The assessee contended that, accordingly, it was entitled to refund of Cenvat credit on input services used in rendering the aforesaid services. The appellant specifically invoked Rule 5 of Cenvat Credit Rules, 2004 and Rule 3 of Export of Services Rules, 2005, and the matter was accordingly placed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi. 

CESTAT Held

The CESTAT held that the services rendered by the appellant-assessee qualified as export of services. The Tribunal applied the provisions of Rule 5 of Cenvat Credit Rules, 2004 and Rule 3 of Export of Services Rules, 2005, confirming the eligibility of refund of Cenvat credit on input services. The CESTAT allowed the refund claim and clarified that business auxiliary services rendered to foreign entities, even indirectly, fall within the export of services category. 

List of Cases Cited 

• Garden Silk Mills Ltd. v. Union of India — 2016 (338) E.L.T. 670 (Bom.) — Referred [Para 5]
• Jindal Drugs Pvt. Ltd. v. Union of India — 2016 (342) E.L.T. 17 (Bom.) — Referred [Para 5]
• Larsen & Toubro Ltd. v. Commissioner — 2013 (32) S.T.R. 410 (Tribunal) — Referred [Para 4]
• Manisha Pharmo Plast Pvt. Ltd. v. Union of India — 2020 (374) E.L.T. 145 (S.C.) — Referred [Para 5]
• Microsoft Corporation (I) Pvt. Ltd. v. Commissioner — 2014 (36) S.T.R. 766 (Tribunal) — Followed [Paras 4, 7]
• Microsoft Corporation (India) Pvt. Ltd. v. Commissioner — 2018 (18) G.S.T.L. 465 (Tribunal) — Followed [Para 8]
• P.C. Puri v. Commissioner of Income Tax — 1984 SCC Online December 42 — Referred [Para 4]
• Qualcomm India Pvt. Ltd. v. Union of India — 2021 (50) G.S.T.L. 269 (Bom.) — Referred [Para 5]
• Ranbaxy Laboratories Ltd. v. Union of India — 2011 (273) E.L.T. 3 (S.C.) — Referred [Para 5]
• Tahnee Heights Co-Op. Housing Society v. Union of India — 2016 (339) E.L.T. 356 (Bom.) — Referred [Para 6]
• Union of India v. Hamdard (Waqf) Labortories — 2016 (333) E.L.T. 193 (S.C.) — Referred [Para 5]