Dubai service tax

yes, you must charge service tax on invoice since origin of recruiting personnel in india.

No need to pay service tax for these services. Uses of services is outside taxable territory. 

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.

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.

Hi Leher,

I appreciate your gesture. Please note the following -

SERVICE TAX:

1. You are neither liable to charge Service Tax nor shall you show the same in your invoice. Just raise a normal invoice.
2. CENVAT Credit means the services that you receive to provide your recruitment services. E.g. Service Tax charged by your chartered accountant’s (CA) service shall be considered as CENVAT Credit for you as you have paid the CA entire amount including his Service Tax. Indirectly you have shouldered the burden to pay taxes and such services are ultimately being used to provide your output service i.e., recruit services. Hence, if you receive the amount in foreign currency, then you shall be eligible to claim refund of such Service Tax that you indirectly paid for your expenses.
3. However, you shall not worry about taxation. Even if you receive the amount in INR, you shall not be liable to pay taxes. However, you will only not be eligible to claim refund as mentioned in Point No.2 above.
4. Conclusion: In current scenario, you shall not charge and pay Service Tax.

I am not an expert in TDS provisions, however, I believe you shall be made liable to pay TDS on such income.

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