By TIOL News Service

NEW DELHI, MAR 01, 2018: THIS is a Revenue appeal.

The dispute relates to Service Tax liability of the respondent with reference to certain public relation activities carried out by them for their clients.

The alleged services that are sought to be taxed under BAS are 'media monitoring services' in the nature of analysis and/or copies of media contents of interest to the clients, news and views, relating to scientific and technological advancements pertaining to the products and services being dealt with by their clients, business decisions of their competitors, policies of the Government impacting the business, take-over bid, stock market analysis, etc.

The respondent contested the demand by submitting that wherever amount received is for brand promotion they were discharging Service Tax under BAS; that 'Public Relation Management Service' was specifically introduced as a taxable service w.e.f. 01.05.2006 and, thereafter, they were discharging Service Tax on their activity of Public Relation Service also.

The original authority held that these activities are not directly or indirectly relating to business promotion for marketing of goods/services and, as such, are not covered by the tax entry in BAS. The original authority held that 'media monitoring service' is only for broadening the knowledge of the client. Though the said inputs given by the respondent will be used in the business of the clients, the same cannot be considered as an activity in connection with sales promotion.

As mentioned, Revenue is in appeal before CESTAT.

After considering the submissions and the findings of the original authority, the Bench observed that there is no sustainable ground in the appeal by the Revenue.

Inasmuch as the CESTAT held -

+ it is clear that the 'media monitoring service', though incidental, may help the client to formulate certain policies to help them improve their business but has no direct nexus to such sales promotion.

+ arranging interviews or press conference can be for various reasons like disclosing financial performance or clarifying certain issues to the public. As such, the presumption of the Revenue, that 'media monitoring service' and similar such activities are to be taxed under BAS, is not sustainable.

+ such public relation activities are subsequently brought for tax liability w.e.f. 01.05.2006 without amending any of the previous tax entries including BAS.

Concluding that there is no reason to interfere with the impugned order, the appeal by Revenue was dismissed.

(See 2018-TIOL-707-CESTAT-DEL)