Applicability - Foreign Commission - Refund Claim

[satbir singhwahi]

regarding service tax on foreign agent commission,whether applicable from 16.06.2005 only or prior also ,as dept is asking from 09.07.2004.. Further whether this service tax can be refunded if the unit is exporting goods and not registered with excise dept. Any other way to claim refund may be guided.

[Surender Gupta]

Commission paid to foreign commission agent became taxable by inserting explanation to Section 65(105). However this provision has been challanged before the Madras High Court. Legislature has also removed this explanation by Finance Act, 2006. Therefore, you may wait and watch the development.

AI Summary

Service tax on foreign agent commissions applicable from June 16, 2005; earlier demand challenged. Refunds for unregistered exporters? A query was raised about the applicability of service tax on foreign agent commissions, questioning whether it applied from June 16, 2005, or earlier, as the department demanded from July 9, 2004. Additionally, there was an inquiry about the possibility of claiming a refund if the exporting unit is not registered with the excise department. The response indicated that the tax became applicable through an explanation to Section 65(105), which was later challenged in the Madras High Court and subsequently removed by the Finance Act, 2006, suggesting a wait-and-see approach.