Applicability of service tax - export of service

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 July 2016 I request the learned and experienced to please clarify on the following:

An Indian Company (registered under Central Excise & Service Tax and having its office only in India) markets for the sale of products of a Foreign Company since April 2013.

The Foreign Company directly receives orders from the end customers in India.

This foreign Co. has no establishment / offices in India.

The Foreign Co. supplies the instruments to their end customer and requests the Indian Company to complete the installation and commissioning of their instruments (exported by the foreign Co. to India) at their end customers site in India. The foreign Co. pays the Indian Company in convertible foreign exchange for the Technical Services / Business Auxiliary Services.

Please clarify the following with corresponding rules and case laws, if any:

a. Can this be classified as Export of Service and hence Service Tax is not applicable.
b. If we are we Liable to pay Service Tax, can we claim credit of the same?

Regards,
Harish

bharath

bharath (Expert)
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26 July 2016 Hi,
Service tax would be applicable as the place criteria is not satisfied, to classify the same as export place of goods should be outside India.
Incase you are paying Service tax you can adjust against input services and if any balance after utilization of can be paid by cash.