2008 (10) TMI 43 - AT - Service Tax

Respondents are paying commission to foreign based commission agents in respect of goods being exported. The foreign based commission agent is booking order on behalf of the appellant and goods were supplied from India period of dispute is 9.7.04 to 31.3.05 - impugned services became taxable service w.e.f. 1.1.05 and recipient of such service could not be held liable for paying service tax prior to 1.1.05 matter is remanded back to Commissioner (Appeals) to decide afresh

Summary

Issues:
1. Whether service tax is leviable on services provided by foreign-based commission agents for goods being exported from India.

Analysis:
The appeal was filed by the revenue against the order passed by the Commissioner (Appeals) where it was held that service tax is not leviable as the service was not provided inside India. The revenue argued that the respondent received services from foreign-based commission agents for goods being exported, and as the service providers did not have an office in India, the respondent was liable to pay service tax. The revenue relied on a Tribunal decision in the case of Hindustan Zinc Ltd. The respondent contended that since the service was never provided in India, they were not liable for service tax.

Upon examination, it was found that the respondents paid commission to foreign-based commission agents for goods being exported, with the agents booking orders on behalf of the appellant. The Tribunal held that the taxable service provided by a non-resident from outside India, without an office in India, was specified as taxable service from 1.1.05. The period of dispute in this case was from 9.7.04 to 31.3.05. Therefore, the matter required reconsideration. The impugned order was set aside, and the case was remanded back to the Commissioner (Appeals) for fresh consideration after providing an opportunity of hearing to the appellant. The appeal was disposed of by way of remand.