21 January 2015
A PVT Ltd Company is providing HR consultancy service to a client based in Dubai. Their client has a office in India also. The candidate has been interviewed in India and recruited for Dubai Office. The billing has been done to Dubai entity and payment will be received in convertible forex.
What is the service tax implication and can any benefit be claimed under Export of Services?
21 January 2015
As Service received in India, Service Tax as applicable... it is same as Sales Tax.. Sales tax will be applicable based on ship to address of goods, not on bill to address.
Suppose, Dubai entity don't have office in India and all recruitment placed only in Dubai, then this will be considered as export of service, as service receipt outside India and payment in convertible Forex currency
21 January 2015
Since business entity have office India, department always claims, how we know, the said recruitment service received only by Dubai office. Generally, in any company can recruitment employee in India and transfer them to anywhere in the world, where they have office.
Justification for above question from department by your customer very difficult and it will lead to issue SCN and you need to go for appeal to prove all recruitment for Dubai with all supporting documents.
CAclubindia
