Do i have to pay service tax

Save Share

This query is : Resolved

Samir (Querist)

08 August 2012 Hi,

We are a Mumbai based company and we work for a company based in USA to help them locate call centers and perform all the quality checks on a regular basis.

For this service we get paid a commission by the company is USA.

We basically try to provide any service that we can to ensure that our client in USA is happy and the quality is maintained.

I'd like to know if we have to pay service tax since we invoice the client in USA and we get paid in Forex by them.

We dont have any payments from the Indian call centers.

Any help in this regards would be great and any references would be nice.

Amol S Joglekar

Amol S Joglekar (Expert)

08 August 2012 Refer place of providing of services rules. notification 28/2012. You need to pay the service tax

Samir

Samir (Querist)

08 August 2012 Is there any way we could structure the company so that we dont have to pay the service tax?

Any type of contracts, since the clients in USA are flexible enough to work with us to avoid this.

Paying a service tax would basically eliminate most of our profits since we have about 12% margin so far post other taxes and expenses.

Arun Kumar Singh

Arun Kumar Singh (Expert)

08 August 2012 Provider of services is located in India and Recipient of service is located in non-taxable territory and payment will be received in foreign currency. It will be export of service and service tax will be exempt from export of service.

Amol S Joglekar

Amol S Joglekar (Expert)

08 August 2012 I beg to differ. the order of rules say that the service is provided from within India. Rule 9 suggests that it is taxable in India. (Divide of opinion is always welcome)

Samir

Samir (Querist)

08 August 2012 This is exactly the reason why I am looking for a clarification on the matter. I got conflicting opinions from two CA's and now I am doubt what applies.

Anyone else who can chime in and shed some light to this matter?

Amol S Joglekar

Amol S Joglekar (Expert)

08 August 2012 Yes. Contact the Service Tax officer / Superintendent of your jurisdiction. Currently they are on the drive to collect new and new assessees.

Samir

Samir (Querist)

12 August 2012 Hi,

I am sure there are a bunch of companies like call centers, software services companies, lead generation companies etc, who will be having the same issues as I am.

Hence the reason for keeping this issue as open. I want to get more responses from people who have experience in this regard.

Thanks for the responses so far since they've definitely been helpful.

Amol S Joglekar

Amol S Joglekar (Expert)

14 August 2012 In fact, I feel with such issues, we all will come to know the LATENT feelings of GOVT in changing the service tax. One thing is sure, Govt wants to bring everything under the service tax NET.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now