Pre-deposit waived in foreign service tax dispute on commission and technical know-how services, with recovery stayed pending appeal.

Pre-deposit of service tax, interest and penalties was waived where the demand arose from commission paid to a foreign agent and services of foreign collaborators for transfer of technical know-how. The department's liability depended on treating the applicants as recipients of taxable services under the relevant service tax provisions for the disputed periods, while the applicants argued that such liability arose only from 18-4-2006. That contention was found prima facie supportable in light of decisions on the taxability of services provided from outside India and received in India, and recovery was stayed pending the appeals.

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Issues: Whether the applicants were required to pre-deposit the service tax, interest and penalties demanded on commission paid to a foreign agent and on services of foreign collaborators for transfer of technical know-how, pending disposal of the appeals.

Analysis: The liability asserted by the department depended on treating the applicants as recipients of taxable services under the relevant service tax provisions for the disputed periods. The applicants' contention that such liability arose only from 18-4-2006 was found prima facie supportable in light of the cited decisions on taxability of services provided from outside India and received in India.

Outcome: The requirement of pre-deposit was waived and recovery was stayed pending the appeals.

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