Externally Funded Research projects do not attract Service Tax:

The Central Excise and Service Tax Appellate Tribunal (CESTAT) ruled that externally funded research projects are not liable for service tax. The case involved an appeal against the imposition of service tax on a university for research projects funded by external organizations. CESTAT held that since the projects were funded by external bodies and the university acted as a facilitator, not providing any taxable service, service tax was not applicable. The decision emphasized that for service tax to apply, there must be a provision of taxable service for consideration. This ruling clarifies that research activities funded by external entities do not attract service tax liability under current regulations.