Service tax on foreign commission agent services applies only from 1-1-2005; liability remanded for quantification.

A recipient of commission agent service from a foreign provider with no office in India was held liable to service tax only from 1-1-2005 under Notification No. 36/2004, following the Larger Bench view. Since the service tax and interest had already been deposited and liability from that date was accepted, the Tribunal remanded the matter only for quantification of the duty liability. Penalty was not finally decided and was left open for consideration before the original authority.

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Issues: Whether the recipient of commission agent service from a foreign service provider having no office in India was liable to service tax only from 1-1-2005 and whether the matter required remand for quantification of liability.

Analysis: The service recipient had already deposited the entire service tax along with interest. The Tribunal followed the Larger Bench view that where the service provider is not resident in India and has no office in India, the recipient becomes liable to service tax only with effect from 1-1-2005 under Notification No. 36/2004. In view of that settled position, the appellant accepted liability from that date onwards and sought remand only for computation of the duty liability. The question of penalty was not finally adjudicated and was left open to be raised before the original authority.

Conclusion: The recipient's liability to service tax was recognised only from 1-1-2005, and the matter was remanded for quantification.

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