Service tax on call centre

Dear Sir,

A Partnership Firm operating a call centre, doing business with foreign assessee. every month they will received a remitance(Income)  from foreign assessee in foreign currency and this foreign currency is converted in india in totaly in Indian Rupees.they are providing service for calling to customer of us based co. there remitance is exceed the limit of10 lakhs. Now my question is that?

1) Whether Service Tax is Applicable? if yes

2) whether it is exempt under export of service rules?

3) it is mandatory to obtain service tax No for firm doing such kind of business.

4) the firms total service is out of india.

Please give us quick response of the above matter.

Thanks in advance

Call Centre services come under the category of Business Auxiliary Services. Call Centre Services were fully exempted from levy of service tax w.e.f. 1^st July, 2003, vide notification No. 8/2003-Service Tax, dated 20^th June, 2003. But this exemption was rescinded vide Notification No.2/2006 – ST dated 1.03.2006.

But as per Rule 3(1)(iii) of Export of Service Rules, 2005 - "Export of taxable services shall, in relation to taxable services‚ specified in clause (105) of section 65 of the Act, (excluding some services) when provided in relation to business or commerce, be provision of such services to a recipient located outside India and when provided otherwise, be provision of such services to a recipient located outside India at the time of provision of such service."

Hence, even though the exemption provided to call centres has been withdrawn, where Call Centre Services are provided to Recipients located outside India, it should be considered as Export of Service under the above said Rules and hence no service tax is payable.

Further as per section 69 of Finance Act, 1994 - Person liable to pay Service Tax has to apply for Registration. In case one is not required to pay service tax, it seems registration is also not required.

We have a call center , we provide technical service to our oversees individual consumer/client. But we receive payment from one of our Indian Payment Gateway Provider. Though our payment gateway provider receive payment in $ but they give us in INR after taking their commision. This payment gateway provider give us Admin Control or CRM Panel through which we can see how many clients we have and how much $ each client paid to us.

While the payment provider pay us in INR they dont deduct any service tax exept TDS.

So my question is - will we have to pay service tax for the payment we receive from this payment gateway provider?

As we receive more than 10 laks in a year.

 

Your sincere answer will help us a lot.

 

You are providing service in India and also receiving consideration in INR. In light of the same you will have to pay service tax. The type of transactions in which you are currently engaged, you can not fit in the nomenclature of export of service, and thus liable to service tax.