Management & Maintenance Service

CESTAT, BANGLORE BENCH
Phoenix IT Solutions Ltd. (vs) Commissioner of Central Excise*, Visakhapatnam
Section 65(104c) of the Finance Act, 1994 – Business – Support services – Period 1-7-2003 to 30-9-2006 – Assessee under agreements with electricity companies provided billing and accounting services – In terms of contract, electricity department had to provide meter reading books on prescribed dates and assessee was required to enter data of meter readings, verify same, incorporate it in computer master and process bills – Whether above activity was classifiable under ‘support services of business or commerce’ – Held, yes [Para 18]
Sections 65(64) of the finance Act, 1994- Management, maintenance or repair service – Period 1-7-2003 to 30-9-2006 – Assessee provided software maintenance services to electricity companies, such as e-care maintenance, website maintenance and database maintenance – Commissioner held that said services would be taxable under maintenance and repair service with effect from 9-7-2004 – However, Explanation inserted in section in section 65(64) with effect from 1-6-2007 clarified that ‘goods’ would include computer software – Whether it would not be appropriate to apply said Explanation retrospectively and levy service tax with effect from 9-7-2004 – Held, yes – Whether, therefore, software maintenance service provided by assessee would be taxable only from 1-6-2007 – Held. yes [Para 13]