Recipient-side service tax on foreign services arose only from Section 66A; pre-18.04.2006 demand was unsustainable.

Service tax on services received in India from a person located abroad became chargeable only from 18.04.2006, when Section 66A of the Finance Act, 1994 came into force. The Tribunal relied on binding precedent and the departmental circular dated 26.09.2011 to confirm that no recipient-side liability existed for the prior period. Accordingly, a demand covering the pre-18.04.2006 period was not sustainable, and the assessee succeeded.

---

---

Issues: Whether service tax was payable by the recipient in India on services received from abroad for the period prior to 18.04.2006.

Analysis: The liability on a recipient in India for taxable services provided by a person located outside India arises only from 18.04.2006, when Section 66A of the Finance Act, 1994 came into force. The issue had already been settled by the binding judicial precedent relied upon by the Tribunal, and the departmental circular of 26.09.2011 also clarified the same position. As the demand related to a period prior to that date, the confirmation of service tax could not be sustained.

Conclusion: The demand was not sustainable for the pre-18.04.2006 period and the appellant succeeded.

---