Service tax liability follows the date of service rendition, not later receipt of payment for completed work.

Service tax liability for Manpower Recruitment or Supply Agency Service depends on when the taxable service is rendered, not when payment is received. Where services were completed before 01.05.2006, the later amendment expanding the service scope did not permit taxation merely because receipts came after that date. The Board's clarification supported the view that post-01.05.2006 collections relating to pre-01.05.2006 placement activities were outside the levy. Accordingly, receipts linked to services rendered before the levy became applicable were not chargeable to service tax, and the demand could not be sustained.

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Issues: Whether service tax under the category of Manpower Recruitment or Supply Agency Service could be demanded on amounts received after 01.05.2006 when the corresponding services had been rendered before that date.

Analysis: The liability to service tax depends on the date on which the taxable service is rendered. The amendment with effect from 01.05.2006 expanded the scope of the service, but receipts relating to services already completed before that date could not be subjected to tax merely because payment was received later. The clarification issued by the Board supported the position that no tax is chargeable where the service itself was rendered before the levy became applicable, and the record showed that the post-01.05.2006 receipts were relatable to pre-01.05.2006 placement activities.

Conclusion: Service tax was not payable on receipts collected after 01.05.2006 if they pertained to services rendered before that date, and the demand could not be sustained against the assessee.

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