Hello,
I am supposed to give my IPC exams this November. I have a doubt and would really appreciate it if someone could help me out.
I have been studying that 'Services provided to a sister concern or an associated enterprise are considered as taxable services and hence service tax on them is payable.'
However, while going through the suggested answers booklet for IPC May 2013, I came across this question,
"Mumbai Branch of ABC Ltd. provides services to Baroda Branch of ABC Ltd, are these services taxable?"
Naturally, going by what I had learnt, I thought that they will be taxable, but the suggested answer booklet says otherwise.
It says that,
"Since both branches belong to the same company and services provided fall in the same taxable territory, these services will not be taxable as services provided to oneself are not taxable"
This leaves me perplexed as the practice manual and suggested answers book seem to be contradicting each other.
Looking forward to your views on this.
Thanks.
CAclubindia
