Service tax on foreign broker commission was not payable for sales-arranging services before 18.04.2006.

Service tax was not payable on commission paid to foreign brokers or commission agents for arranging sales of goods for the period prior to 18.04.2006, because the liability under Rule 2(1)(d)(iv) of the Service Tax Rules was not sustainable for that period and the issue was treated as settled by binding precedent. The commission paid to agents situated abroad for facilitating sales therefore did not attract service tax under the applicable machinery, and the demand could not be sustained.

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Issues: Whether service tax was payable on commission paid to foreign brokers or commission agents for arranging sale of goods for the period prior to 18.04.2006.

Analysis: The period in dispute was prior to 18.04.2006 and the tax demand arose from commission paid to agents situated abroad for arranging sales. The issue was treated as already settled by binding precedent, and the liability fastened under Rule 2(1)(d)(iv) of the Service Tax Rules was not sustainable for that period.

Conclusion: Service tax was held to be not payable on the commission paid to foreign brokers or commission agents for the relevant period, and the demand could not be sustained.

Final Conclusion: The impugned order was set aside and the appeal was allowed.

Ratio Decidendi: For the period prior to 18.04.2006, commission paid to foreign agents for arranging sale of goods did not attract service tax under the applicable service tax machinery.

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