Prospective service tax liability on imported services begins only after Section 66A, not for the pre-amendment period.

Service tax on an Indian recipient for services received from a person resident outside India was not chargeable before the introduction of Section 66A. The pre-amendment scheme of the Finance Act did not confer authority on the revenue to levy tax on the recipient for foreign services, and liability remained with the service provider. The amendment was treated as prospective, so the period before 18.4.2006 fell outside the charging provision for recipient-based taxation of imported services. The issue was accordingly decided in favour of the assessee, and tax could not be levied for the earlier period.

---

---

Issues: Whether service tax could be levied on the recipient in India for services received from a person resident outside India prior to the introduction of Section 66A, and whether the revenue had authority to tax such recipient for the earlier period.

Analysis: The liability of a recipient in India for services obtained from outside India arose only after the statutory amendment introducing Section 66A. Before that amendment, the scheme of the Finance Act did not vest authority in the revenue to levy service tax on the recipient of such services, and tax was recoverable only from the person rendering the service. The Court followed the view that the amendment was prospective and that the pre-18.4.2006 period was outside the charging provision for recipients of foreign services.

Conclusion: The issue was decided in favour of the assessee, and service tax could not be levied on the recipient for the period prior to 18.4.2006.

---