Kuwait

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 September 2010 Hello Experts,

if the invoice is raised on a Kuwait company and the remittance is received in INR,will service tax be applicable?

Thanks & regards

SANJAY TALATI

SANJAY TALATI (Expert)
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02 September 2010 The liability of the Service tax does not depend on whether the payt is received in INR or in foreign currency. There are provisions for the Import and Export of services.

Kindly clarify the nature of service provided to guide properly.

Querist : Anonymous

Querist : Anonymous (Querist)

02 September 2010 The nature of service is advertisement.

SANJAY TALATI

SANJAY TALATI (Expert)
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02 September 2010 Querry pertains to the Export of Services Rules, 2005 notified vide notification no. 9/2005 S.T. dtd. 03/03/2005. The provision of any taxable service shall be treated as Export of service when the following conditions are satisfied namely
(a) such service is delivered outside India and used outside ; and
(b) payment for such service provided outside India is received by the service provider in convertible foreign exchange.

Rule 4 of the Said Rules provides that any service which is taxable under clause(105) of sec. 65 of the Act, may be exported without payment of service tax.

Thus, the receipt in the convertible foreign exchange is essential to qualify for exemption.