Export of service

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Unicorn (Querist)
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07 October 2013 The company is situated in Bangalore , providing services to both Domestic as well as Foreign clients.
It provides services such as setting up websites, designing & coding , etc...
Services are provided online from their Bangalore Setup to Clients abroad.
Should Service Tax be levied on these invoices to Foreign customers?

CA Pallav Singhania

CA Pallav Singhania (Expert)
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07 October 2013 Export of services is exempted from tax levy..

However, service provided in Indian territory will be liable to Service Tax..

CA Pallav Singhania

CA Pallav Singhania (Expert)
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07 October 2013 As per Rule 6A of Service Tax Rules, 1994, provision of any service provided or agreed to be provided shall be termed as Export of Service if following conditions are satisfied:-

1. The provider of taxable service is located in taxable territory.

2. the recipient of service is located outside India.

3. the service is not a service specified in the negative list [Section 66D].

4. the place of provision of the service is outside india.

5. the payment for such service has been received by the provider of service in convertible foreign exchange.

As per my view, In your case all the above conditions are satisfied. Hence, it will be covered under export of service and you are not liable to pay service tax.

Unicorn

Unicorn (Querist)
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07 October 2013 Assume, the Customer has been sent an invoice along with ST on the invoice... and the Customer has also made the payment against the invoice.. Can the Invoice be cancelled, and a fresh invoice without the ST be issued? Or should the ST be paid to the govt, and then a Refund be claimed?

CA Pallav Singhania

CA Pallav Singhania (Expert)
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07 October 2013 Refund can be claimed un such situation....

Unicorn

Unicorn (Querist)
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07 October 2013 Instead of Remitting it to the govt, and claiming a refund which will take 6months to a year !
Can we cancel the original invoice and Issue a fresh invoice to both the customer as well as the Bank...to avoid unnecessary payment of ST to the govt, on this export of service

CA Pallav Singhania

CA Pallav Singhania (Expert)
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07 October 2013 Yes, you can do so, as ST on export of service is not applicable...

Unicorn

Unicorn (Querist)
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07 October 2013 Thanks a lot, Very Helpful !

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