Refund of service tax on foreign consulting engineer services allowed for pre-2005 period under non-resident taxability rule.

Service tax paid in India on consulting engineer's services received from a non-resident provider abroad was treated as wrongly collected for a period before 1-1-2005. The Tribunal applied the Larger Bench view that, prior to that date, taxable services provided from outside India by a non-resident without an office in India were not taxable in the hands of the recipient in India. On that basis, the refund claim for the April to September 2003 period was allowable.

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Issues: Whether service tax paid by the recipient in India on consulting engineer's service received from a non-resident service provider abroad, for a period prior to 1-1-2005, was refundable.

Analysis: The refund claim concerned service tax paid on consulting engineer's service received from outside India during April to September 2003. The Tribunal treated the issue as covered by the Larger Bench ruling that, prior to 1-1-2005, taxable services provided by a non-resident from outside India without an office in India were not taxable in the hands of the recipient in India. As the claim related to a period before that date, the tax was held to have been wrongly collected from the recipient.

Conclusion: The refund claim was allowable and the assessee succeeded.

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