Applicability of service tax

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kalpit (Querist)
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29 May 2012 Please advise in the following matter:-

There is an Individual rendering the professional service of technical inspection. He renders his service to an Indian company within India. The invoice is raised to the foreign company which does not has any Permanent Establishment in India that foreign company is just holding PAN in Indian. That foreign company will in turn raise invoice to the Indian company and this Indian company will invoice the customer for the same service.

Now the question is whether service tax is applicable or not in this situation. Because you see the individual is performing its activity in India while raising the invoice for the same to the foreign company and receiving payment for the same from that company.

In other words an Indian client contacted an foreign company for particular job and that foreign company hired and Indian Individual to perform this service in India. The Indian individual will invoice to that foreign company only and will receive payment from that company only, it is just that the performance of the service is done in India. Whether the Indian Individual will be liable to charge service tax in the Invoice raised to the Foreign Company.

CA UMESHKUMAR R. ACHARYA

CA UMESHKUMAR R. ACHARYA (Expert)
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21 June 2012
From Going through Facts and Details it seems that Technical Person, Foreign Company and its Indian Company all three will be liable for service tax.

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