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Service tax - software development (export + domestic)

GPS M. (Proprietor) (28 Points)

22 December 2011

I provide Software Services to various clients across the globe and my gross reciepts >> 10Lac. This being software export, the service tax is not applicable here. Now, I am planning to take on some domestic clients for which service tax will be applicable. I need to know, if my receipts from domestic clients for an year is < 10lac, do I still need to comply with service tax?

Again to clarify, my total receipts would be >10lac, but the domestic ones will be less than 10 lac. Do I need to register for service tax?

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6 Replies

praveen (Chartered Accountant) (6971 Points)
Replied 23 December 2011

As per

Service Tax (Registration of Special Category of Persons) Rules, 2005

3 (2) Any provider of taxable service whose aggregate value of taxable service in a financial year exceeds [nine lakh rupees]² shall make an application to the jurisdictional Superintendent of Central Excise in such form as may be specified, by notification, by the Board, for registration within a period of thirty days of exceeding the aggregate value of taxable service of [nine lakh rupees]²

HENCE IT IS CLEAR THAT YOU WILL HAVE TO REGISTER FOR SERVICE TAX IF YOUR TAXABLE SERVICE IS GREATER THAN 9.00 LACS.

as exports are not taxable services you can be exclude them

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GPS M. (Proprietor) (28 Points)
Replied 24 December 2011

Thanks a lot for your reply Praveen. Appreciated!

The reference to the law clarifies it.

Nitesh Agarwal (Sector Speaclist) (21 Points)
Replied 29 December 2011

Just like to check on the taxability of Domestic services, I think you are bound to pay the service tax if your total domestic revenue from sofware services is more than Rs. 10 Lacs in any financial year? Also the service tax is payable on the whole amount or just the amount above Rs. 10 Lacs? Also is VAT is also payable on software exports?

Thanks