Service tax on sub-broker brokerage was unsustainable against the stock broker after the 10-9-2004 amendment.

Service tax on brokerage attributable to a sub-broker for the period after 10-9-2004 was not sustainable against the stock broker, because the taxable value in question had been covered by Notification No. 25/2004-ST and the amended definition brought sub-brokers within the service tax net from that date. On the stated facts, liability for the sub-broker's service could not be fastened on the stock broker for 10-9-2004 to 30-9-2004.

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Issues: Whether service tax demand could be sustained against a stock broker on the portion of brokerage/service attributable to a sub-broker for the period after 10-9-2004.

Analysis: The demand related only to the portion of taxable value charged by the sub-broker during 10-9-2004 to 30-9-2004. The adjudicating authority had already dropped the earlier period on the basis that the relevant portion of brokerage was covered by Notification No. 25/2004-ST dated 10-9-2004 and that, from that date, sub-brokers were brought within the service tax net by the amended definition. On these facts, the liability for the service provided by the sub-broker could not be fastened on the stock broker.

Conclusion: The demand was not sustainable against the assessee.

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