Reverse charge mechanism on commission paid to foreign...

Reverse charge mechanism on commission paid to foreign commission agents does not attract service tax liability. Documentary evidence shows no direct payment made to commission agents by appellant, rather deduction from total invoice value raised on foreign buyer constitutes trade discount. Absence of contractual relationship between appellant and foreign service provider, coupled with lack of direct transaction, precludes service tax demand on commission shown in buyer's invoice. Tribunal relied on precedents in Laxmi Exports and Aquamarine Exports cases, where commission deducted was held as trade discount not subjected to service tax. Issue settled in favor of assessee, demand of service tax on commission deducted in sale invoice to foreign buyer not chargeable. Impugned order set aside, appeal allowed.