Service Tax Demand of Rs. 129 Crore issued to Microsoft

New Delhi. Delhi Service Tax Commissionerate has issued a Show Cause cum Demand Notice of Rs. 129.32 Cores against M/s Microsoft Corporation (India) Private Limited headquarter at Gurgaon for non-payment of Service Tax on several notified taxable services provided by them, which were detected during the Service Tax audit of the company.

The demands pertains to following issues:

  1. The marketing and user support service             Rs  126.75 Crores
  2. Maintenance or repair service                           Rs  1.28 Crores
  3. Convention Services                                       Rs 1.25 Crores
  4. Royalty paid to Microsoft Corporation USA          Rs. 3,20,896/-

                The major amount of demand related to the payments received by Microsoft India for providing the services of marketing and user support in India for which the payments were received from the Microsoft Operations Singapore. The Service Tax department has alleged that these services are consumed in India as the market and the users are located in India and therefore, do not qualify as export of Service and thus are not exempt from Service Tax.

(Source: Allindiantaxes)

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