Chargiability of service tax

This query is : Resolved

Nikhilendra Patel (Querist)
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02 January 2016 An Indian Company (A) received a work order for the installation of plant and machinery in Africa. Indian Company (A) want to give subcontract to the branch of another Indian company (B). Indian company Branch is registered in Africa and liable for the local taxes and is fully owned of Indian Company.
My Query is :
1. Whether service tax is applicable if services are executed by the Branch of Indian Company and services received outside India. Payment made by Indian company (A) to the branch of Indian company (B) situated outside India?
2. If services rendered by the branch of Indian company is controlled/monitored by Indian company head office in India and salary and wages of the person working outside Indian is paid in India?
3. Whether branch will be treated as SPV created for tax evasion and service tax will be charged to Indian company. When all the bills executed from the branch and amount received in branch.
Please suggest.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 January 2016 All the above situations are not relevant for service tax. Here the service is rendered in Africa, out side the taxable territory so no service tax payable.

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