Leher (Manager) (33 Points)
22 September 2013We have a recruitment company in India but we place candidates from India and Dubai in Dubai.
Dubai company is transferring funds in INR to our bank account for the services we are giving them.
Please let us know whether Service Tax is applicable on the services we provide in Dubai means should we add service tax in our invoice or not.
Gaurav Jain
(ca)
(42 Points)
Replied 22 September 2013
yes, you must charge service tax on invoice since origin of recruiting personnel in india.
Arun Kumar Singh
(GST Advocate)
(15188 Points)
Replied 23 September 2013
No need to pay service tax for these services. Uses of services is outside taxable territory.
Vikas
(CA)
(1135 Points)
Replied 25 September 2013
Dear friend,
Service Tax for cross-border transactions is neither determined merely on the basis of its consumption or the origin. In such cases, you must refer to Place of Provision of Services Rules, 2012 (PPSR).
Since, this activity is not being governed by any of the specific rules of PPSR, it shall be governed by main / general rule 3 of PPSR, meaning the location of service recipient shall be seen to determine the place of provision.
In this case, the location of service recipient is outside the taxable territory i.e., in Dubai, hence, such service shall not be subjected to tax.
However, you may further note that since, you are not receiving in Foreign exchange, you will not be able to claim CENVAT Credit of the input services used for provision of such output services.
Leher
(Manager)
(33 Points)
Replied 25 September 2013
| Originally posted by : Vikas Vishwakarma | ||
 |
Dear friend, Service Tax for cross-border transactions is neither determined merely on the basis of its consumption or the origin. In such cases, you must refer to Place of Provision of Services Rules, 2012 (PPSR). Since, this activity is not being governed by any of the specific rules of PPSR, it shall be governed by main / general rule 3 of PPSR, meaning the location of service recipient shall be seen to determine the place of provision. In this case, the location of service recipient is outside the taxable territory i.e., in Dubai, hence, such service shall not be subjected to tax. However, you may further note that since, you are not receiving in Foreign exchange, you will not be able to claim CENVAT Credit of the input services used for provision of such output services. |
 |
It means we do not have to mention 12.36 as service tax in the invoices we send to Dubai/Sharjah.
As i am not from finance background that is why i am not able to understand the meaning of CENVAT.
I hope it is not something which can create problem.
One more thing : But we have to pay TDS on the received amount from Dubai/Sharjah or that will also not come while calculating TDS.
Vikas
(CA)
(1135 Points)
Replied 26 September 2013
Hi Leher,
I appreciate your gesture. Please note the following -
SERVICE TAX:
I am not an expert in TDS provisions, however, I believe you shall be made liable to pay TDS on such income.
Prasad
(Sr. Manager)
(617 Points)
Replied 26 September 2013
TDS is Tax deduction at Source; deducted by the payer, you are receving the amount from Dubai, which means that your payer will not be under obligation to deduct tax at source (TDS) under Indian Income tax Act.
You are not required to pay any TDS on amounts received from Dubai nor any amount will be deducted from your invoices, if you are invoicing your Dubai Customer
CAclubindia
