2009 (8) TMI 376 - AT - Service Tax

Services received from outside India- commission to a foreign agent- Department confirm a demand against the appellant on the ground that services of foreign collaborators for transfer of technical know-how were received, therefore assessee required to pay service tax from 01.01.2005. In the light of the decision of Indian National Shipowners Association v. Union of India 2009 -TMI - 32747 - BOMBAY HIGH COURT held that, liability to pay service tax arise from 18.04.2006 thus waive the requirement of pre-deposit the tax amount.

Summary

The Appellate Tribunal CESTAT, CHENNAI, comprising of MS. JYOTI BALASUNDARAM, VICE PRESIDENT, AND DR. CHITTARANJAN SATAPATHY, TECHNICAL MEMBER, issued an order in which two appeals were heard together and disposed of. In Appeal No. S/29/09, a service tax demand of Rs. 10,35,624 was confirmed against the applicants for paying commission to a foreign agent, leading to the imposition of penalties and interest. In Appeal No. S/30/09, a demand of Rs. 37,13,657 was confirmed for receiving services from foreign collaborators for technical know-how transfer, resulting in similar penalties. The applicants argued that service tax liability arose only from 18-4-2006 due to the service provider being situated outside India. The Tribunal, citing previous judgments, ruled in favor of the applicants, waiving the requirement of pre-deposit and staying recovery of the disputed amounts pending appeals. This judgment highlights the importance of considering the location of service provision in determining service tax liability.