2026-VIL-271-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax on Overseas Commission Agents - Appellant engaged overseas commission agents to act as non-exclusive sales representatives. The services provided by the overseas commission agents included market research, procuring RFQs, making presentations, price negotiations, and providing sales and after-sales services. The Department raised a demand of service tax on the commission paid to the overseas agents – HELD - For the Period: 1.4.2011-30.6.2012, as per the Board's Circular and the Tribunal order in Genom Biotech case, the services have to be received in India for the same to be taxable under Section 66A. Since the services were clearly received in abroad and not in India, the services are not liable to service tax - For the Period: 1.7.2012-30.9.2014, the service tax is liable to be paid only when service has been received and consideration has been paid. In the instant case, no service was rendered and no consideration was paid. Hence, the liability of service tax does not arise. However, the fact of reversal of such provision in the subsequent year needs to be verified – For the Period: 1.10.2014-31.3.2016, the definition of "intermediary" was amended w.e.f. 1.10.2014 to cover services of arranging or facilitating supply of goods between two or more persons, such as a commission agent. Consequently, the place of provision of services would be the location of the service provider, i.e., the overseas commission agent. Since the commission agent was located abroad, the liability of service tax would not arise - As regards the liability on the two invoices, it has been submitted that no payment was made even though the invoices had been raised. This fact would also have to be verified. It is settled legal provision that the liability to pay service tax arises only when the service is provided. In the instant case, it has been categorically submitted that the service was not provided by the overseas Commissioner Agent. Consequently, the liability of service tax does not arise - The impugned order is set aside and matter is remanded to the original adjudicating authority to hear the appellant and consider the relevant documents to substantiate their contentions - The appeal is allowed by way of remand
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