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Service tax exemption

Sagar Joshi (Tax Executive) (25 Points)

09 February 2011

Please help me out in following issue:

Can international Finance corporation get exemption under service tax laws?

Also not that As per Section 9(a) of the International Finance Corporation (Status, Immunities and Privileges) Act, 1958, “the Corporation, its assets, property, income and its operations and transactions authorised by this Agreement, shall be immune from all taxation and from all customs duties. The Corporation shall also be immune from liability for the collection or payment of any tax or duty but corrosponding referance is not there in service tax law.

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7 Replies

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 10 February 2011

service tax applicable for services provided in india, or paid in india.

Sagar Joshi (Tax Executive) (25 Points)
Replied 15 February 2011

Originally posted by : U S Sharma
	service tax applicable for services provided in india, or paid in india.

Yes I know that the service tax is applicable for all the services provided in India but my question is This IFC act is of 1958 and service tax is by Finance Act 1994 thus the earlier act will prevails over the later or not. In IFC act they have clearly provided that there IFC is immun from all kind of taxes so will that act prevails over the Finance Act, 1994

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 15 February 2011

IFC is eligible for customs duty imunization , which is related to "import",

service tax is related to "service provided in india, or received in india, or paid in india"

if IFC receive, offers or pays for any service in india then only service tax is payable.

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CA Unnikrishnan Nair N (Chartered Accountant) (2083 Points)
Replied 16 February 2011

There seems to be no specific exemption under Service Tax law for this service. Hence, the service provided by IFC if it falls under any of the taxable category of service provided in India and/or provided outside India but comes within the purview of import of service definition, may attract service tax. But the legal point on the fact that IFC enacted prior to introduction of service tax law has to be examined further.