Reverse charge service tax on foreign agent commission was set aside as the marketing activity fell within the exemption.

Service tax under reverse charge was held not payable on commission paid to foreign agents for procuring orders, because the agents' promotion and marketing activities were covered by Notification No. 14/2004-ST dated 10.9.2004. The Tribunal followed earlier decisions on identical facts, including the appellant's own case and a similarly placed matter, and concluded that the exemption applied. As a result, the tax demand on the foreign agent commission could not be sustained and was set aside in favour of the assessee.

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Issues: Whether service tax was payable under reverse charge mechanism on commission paid to foreign agents for procuring orders, and whether the benefit of Notification No. 14/2004-ST dated 10.9.2004 was available.

Analysis: The Tribunal noted that the issue had already been decided in the appellant's own case and in a similarly placed case, where it was held that the activities of foreign agents engaged for promotion and marketing of products were covered by the exemption under Notification No. 14/2004-ST dated 10.9.2004. Following the earlier decisions on identical facts, the demand for service tax on the commission paid to foreign agents could not be sustained.

Conclusion: The liability to pay service tax under reverse charge mechanism on the commission paid to foreign agents was negatived and the demand was set aside in favour of the assessee.

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