Export of service

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Dheeraj yadav (Querist)
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12 March 2016 In export of service if service receiver is outside India , it has NRO ACCOUNT in India, then he makes the payment from NRO ACCOUNT to service provider then the service provider is liable for service tax????

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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12 March 2016 Yes, the service provider is liabe for payment of service tax.

To qualify as Export of Service three conditions have to be met:
(a) The service recipient is not a resident in the taxable territories i.e. India. He has no branch, agent, representative or office in the taxable territories.
(b) The services are rendered outside the taxable territories.
(c) The consideration received for services rendered is in convertible foreign currency brought into India through proper channels.

All three conditions are mandatory, and even if one them does not exist the services rendered cannot be treated as export of services.

In your case the third condition is not met, since the consideration received was from an NRO A/C, which is in rupees and not convertible foreign currency. Therefore the services rendered are not export of services and the service provider is liable to pay service tax.

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