21 March 2015
Our client is an Hyderabad based private limited. The company providing a services to its client situated in United Kingdom[UK]. Presently it has only one client, i.e. from UK only.
The nature of the business is: Company A situated in UK, wants advertise in the print media and internet media of its clients business, new project, etc. It has many clients in UK and US. It will accept the assignment from them and given to my client company on 'sharing of income' basis.
So, Company A gives business to my client company. Now, my client company required to arrange the space, slots according to the instructions given by the Company A.
Company A situated in UK and it wants advertise in UK and US only. None of the advertisements coming in the Indian print media and internet media.
Now my question is, whether my client should pay service tax?
22 March 2015
The present case will be governed by rule 3 of place of provision of service rules 2012, the place of provision is the location of the recipient of service i.e UK. Rule 9 can be said to be applicable but it does not fulfills the condition. Thus no tax is required to be paid. For further analysis and updations on Indirect taxation you can log in to our website www.indirecttaxprofessionals.com
23 March 2015
Legally, the registration is not required as on export of services the chargeability of service tax does not arise. However, practically we have to take the registration and show it in our return as otherwise conditions of export of services could not be checked by the department.
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