KARNATAKA UDYOG MITRA Vs. COMMISSIONER OF S.T.

JUDGEMENT

(1.) THE issue involved in this case is whether the appellant, a Government of Karnataka Undertaking/Organization is liable to pay Service Tax on the processing fee (according to them) collected by them is liable to Service Tax under 'Management or Business Consultancy Services' or not. The learned Counsel submitted that according to the website of the appellant, the appellants undertake to provide an environment that helps investors handle investment processes and procedures with case, identify, inform, promote, organize, facilitate, accelerate. According to the website they proposed to achieve this by dissemination of information through print and electronic media, creation and acceleration of industrial tempo, identifying and encouraging prospective investors, providing information to investors and entrepreneurs on the opportunities available in Karnataka for industry, trade and commerce, functioning as the Secretariat for the State Level Single Window Clearance Committee, publishing of data in the form of papers, case studies, reports, brochures, pamphlets, periodicals, digests, journals, project reports, profiles and magazines, organizing, sponsoring, associating and participating in trade fairs, exhibitions, etc. On the ground that appellant is liable to pay Service Tax on the processing fee collected by them in providing services such as escorting the entrepreneurs to various places to identify locations available for setting up of industry, processing of their applications to various departments, assisting them in setting up industry which amounts to provision of Management or Business Consultancy Services, demand for Service Tax of Rs. 2,58,40,805/ - for the period from October, 2006 to March, 2012 has been confirmed. Besides demand with interest, penalties under various Sections of Finance Act, 1994 have also been imposed. After considering submissions of both the sides and going through the records, we came to the conclusion that the matter can be straightaway finally decided especially in view of the fact that the issue is no longer a recurring issue and after 1 -7 -2012 with the introduction of negative list, the appellant may not be liable to pay Service Tax at all. With the consent of both the sides, we take up the appeal itself for final decision.

(2.) THE definition of 'Management or Business Consultancy Service' is as under: