Service tax on imported services arose only from 1-1-2005; recipient was not liable for the earlier period.

Services received in India from outside India were not taxable in the hands of the recipient for the period before 1-1-2005, because the taxable net for such non-resident or foreign services applied only from that date. The Tribunal followed the binding Larger Bench view in an identical matter and held that the recipient had no service tax liability for the pre-1-1-2005 period.

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Issues: Whether the recipient of services received from outside India was liable to pay service tax prior to 1-1-2005.

Analysis: The issue had already been answered by the Larger Bench in an identical matter, where it was held that services provided by a non-resident or from outside India, with no office in India, became taxable only with effect from 1-1-2005. The Tribunal followed that binding view and treated the recipient as not liable for the period before that date.

Conclusion: The issue is answered in favour of the assessee, and no service tax was payable by the recipient prior to 1-1-2005.

Ratio Decidendi: A recipient in India is not liable for service tax on services received from outside India for the period prior to the specific date from which such service was brought within the taxable net.

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