Facilitating access to government-owned data does not constitute an OIDAR service.

MP Online Ltd., a joint venture established to develop and manage Madhya Pradesh’s e-governance portal, collected government fees, educational fees and utility bills through its portal and kiosk network.

It also received fees from kiosk operators and earned interest on funds held before remittance.

The Department confirmed service-tax demands for October 2009 to June 2017, treating certain receipts as OIDAR or otherwise taxable services and seeking tax on interest earned on fixed deposits.

The three appeals challenged the respective orders-in-original confirming those demands.

Whether MP Online’s portal and related services were taxable as OIDAR or other taxable services during the pre-negative-list period, and whether the relevant services were taxable or exempt after 1 July 2012.

Whether interest earned on funds held in fixed deposits before remittance constituted consideration for a taxable service.

Whether the demands confirmed in the three impugned orders should be set aside.

The Tribunal applied the distinction between OIDAR services and the provision of access to data: a service provider cannot provide access to data it does not possess; it relied on United Telecom Ltd. v. Commissioner of Service Tax (2009 (14) S.T.R. 212 (Tri. Bang.)), whose appeal was rejected by the Karnataka High Court, and Air India Ltd. v. Commissioner of Service Tax, New Delhi (2013 (30) S.T.R. 458 (Tri.-Del.)).

It applied the pre- and post-negative-list service-tax frameworks under the Finance Act, 1994, including the exemption for specified educational services under Entry 9(d) of Notification No. 25/2012-ST dated 20 June 2012.

It also applied the principle that interest is the time value of money and, when earned on money deposited with a bank, is not consideration for a service.

The appellant provided a network through which Madhya Pradesh Government data could be accessed by government officers and citizens; it did not supply data of its own. Applying the OIDAR principle, the Tribunal held that this activity was not OIDAR.

It further found that the relevant government-department and educational-institution services before 1 July 2012 were not taxable as business auxiliary or business support services, while services to universities after that date were covered by the stated exemption.

Services to commercial corporations and kiosk operators were treated as taxable, but the appellant had paid service tax on the relevant commissions and franchise fees.

Finally, interest arose from depositing funds pending remittance and was not consideration for a service, so it was not taxable in either period.

Although the Department had relied on extended limitation, the Tribunal did not separately analyse that contention.

It held that the disputed portal activity was not OIDAR, that the identified government and educational services were not taxable or were exempt as applicable, and that interest earned on fixed deposits was not exigible to service tax.