Service tax on imported consulting engineer services arose only from 1-1-2005, not for the earlier period.

Service tax on consulting engineer services received in India from foreign companies with no office in India was not payable by the recipient for the period prior to 1-1-2005. The controlling principle applied was that liability for such services arose only from that date, and the amendment in Rule 2(1)(d) of the Service Tax Rules did not fasten tax liability on the recipient for the earlier period.

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Issues: Whether service tax was payable by the recipient in India on consulting engineer services received from foreign companies having no office in India for the period prior to 1-1-2005.

Analysis: The dispute concerned services rendered from outside India by non-resident entities without any office in India. The controlling principle applied was that such taxable service became liable only from 1-1-2005, and the recipient could not be fastened with service tax liability for the earlier period merely by virtue of the amendment in Rule 2(1)(d) of the Service Tax Rules.

Conclusion: The recipient was not liable to pay service tax for the period prior to 1-1-2005.

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