Clearing and forwarding services performed wholly outside India were held outside service tax liability under the import rules.

Clearing and forwarding services rendered wholly outside India were held not liable to service tax because the relevant import rules excluded such activity from taxability under the Finance Act, 1994. The Tribunal followed its earlier decision on identical facts and held that the charging provision could not be applied in disregard of the rules governing services provided from outside India and received in India. The service was therefore not exigible to service tax.

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Issues: Whether clearing and forwarding services performed wholly outside India were liable to service tax under the Finance Act, 1994 and the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006.

Analysis: The service was rendered entirely outside India, and the relevant rule excluded such activity from service tax liability. The Tribunal followed its earlier decision on identical facts and held that the rule could not be disregarded while applying the charging provision.

Conclusion: The service was not exigible to service tax.

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