ORDER
K.K. Agarwal, Member (T)
1. The appellants in this case is a foreign company based in Singapore, who was providing consultancy service to an Indian Company. They were issued a show cause notice demanding service tax in respect of the services provided to the Indian Company amounting to Rs. 3,56,387/-.
2. Ld. Advocate for the appellants submits that since the service provider is a foreign company and since under the Finance Act 1964 service tax extends to the whole of India except the State of Jammu and Kashmir, the provisions will not be applicable to the foreign national and foreign company and, therefore, service tax cannot be charged from them. It was only with effect from 16/08/2002 that the recipient of the service has been treated as service provider and liable to pay service tax. Prior to that service provided by the foreign company having no business establishment in India cannot be considered as a taxable service and, therefore, service tax cannot be recovered from it.
3. We have considered the submissions. We find that as per Section 64 of the Finance Act 1994, Chapter relating to the service tax extends to the whole of India except the State of Jammu and Kashmir, which means that the tax will not apply, to a person or a company, which is situated out side India having no business establishment in India, Service Tax from such provider of the service cannot be recovered and it is for this purpose only that an amendment was made in 2002, when such service was treated as the taxable service and the recipient of the service was made liable to pay service tax. In view of the above, we allow the appeal and set aside the order of the Commissioner (Appeals).
(Dictated in Court)