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Devendra Kumar Agarwal (Querist)

08 July 2010 A.An Indian exporter has appointed a foreign agent (not having any establishment in India) for marketing its’ products overseas. Based on orders procured by the foreign agent, the goods are exported from India. The agent then recovers the sale proceeds, retains his commission of 5% and remits the balance to India. Whether this transaction shall attract service tax in India?

b. An Indian importer wishes to import a product from an exporter in Spain. In order to ensure appropriate quality control, it appoints a testing agency in Spain to inspect and test the materials before they are dispatched from Spain. The charges of the testing agency are remitted from India. The report of the analysis is submitted in India. Whether this transaction shall attract service tax in India?

c. An Indian hotel appoints a foreign architect for designing a hotel situated in Indore. The architect submits the designs and drawings by E-mail and meeting are arranged through video conferencing. Whether this transaction shall attract service tax in India?

d. In case c, would it make a difference if the hotel is to be constructed at Colombo?

e. In case c, would it further make a difference if the hotel is to be constructed at Jammu?

pls solve the questions & thanks in advance

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

11 July 2010 a. see not 18/19 of 2009 which provides some exmeption.
b. Testing done outside India and report used outside India no ST.
c. Liable under reverse charge. If hotel in Colombo then not liable as Immovable property outside India.

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