2010 (1) TMI 210 - AT - Service Tax

Recipients in India exempt from service tax for services pre-18-4-2006. CESTAT decision clarifies.

The Appellate Tribunal CESTAT, Ahmedabad, ruled that recipients in India were not liable to pay service tax for services received from individuals ... Charges of service tax- Whether prior to 18-4-2006 there was provisions for recovery of Service Tax in relation to services provided by an individual residing outside India or not. In the light of the decision of Indian National Shipowners Association v. Union of India 2009 -TMI - 32013 - HIGH COURT OF BOMBAY, held that- prior to 18-4-2006, recipient of the services availed from outside the India is not liable for service tax. Therefore, we do not find any infirmity in the impugned order and the same is upheld. Accordingly, the appeal filed by the revenue is rejected. Issues:- Whether there were provisions for the recovery of Service Tax in relation to services provided by an individual residing outside India prior to 18-4-2006.Analysis:The Appellate Tribunal CESTAT, Ahmedabad, consisting of Ashok Jindal, Judicial Member, and B.S.V. Murthy, Technical Member, addressed the issue of the applicability of Service Tax prior to 18-4-2006 concerning services provided by individuals residing outside India. The Revenue filed an appeal along with a stay application, contesting the demand of service tax confirmed in the Order in Original. The key contention was the introduction of section 66A of the Finance Act, 1994, effective from 18-4-2006, and the period in question spanned from 1-7-2003 to 28-2-2006. The advocate for the Appellant relied on various decisions to support the argument, including judgments from the Hon'ble High Court of Bombay and other relevant cases.The Tribunal carefully considered the arguments presented by both sides and referred to the judgment of the Hon'ble High Court of Bombay in the case of Indian National Shipowners Association, which established that recipients in India were liable to pay service tax for services received from abroad only after 18-4-2006, following the enactment of section 66A of the Finance Act, 1994. Based on this precedent, the Tribunal concluded that prior to 18-4-2006, recipients of services from outside India were not liable for service tax. Consequently, the impugned order was upheld, and the appeal filed by the Revenue was rejected. The stay application was also disposed of in light of this decision. The judgment provided clarity on the issue of Service Tax liability concerning services provided by individuals residing outside India before the specified date of 18-4-2006, aligning with the legal framework established by relevant precedents and statutory provisions.