Is service tax applicable
This query is : Resolved
CA Sandip Darji
(Querist)
18 March 2015
We are Pvt Limited Company and providing services in India. Now we are paying professional fees to professionals in India on behalf of Foreign company. Professionals are working for that foreign company.
We are Receiving the amount which includes Our fees (Margin) + Professional fees payable to those Professionals.
My Question is that whether Service Tax is applicable or not on that receipt from foreign company.
if it is exempt than in which rule/section/notification.
Thanks in advance
We are Receiving the amount which includes Our fees (Margin) + Professional fees payable to those Professionals.
My Question is that whether Service Tax is applicable or not on that receipt from foreign company.
if it is exempt than in which rule/section/notification.
Thanks in advance
18 March 2015
what is the nature of such professional fees.
CA Sandip Darji
(Querist)
18 March 2015
IT Professionals providing IT related services
18 March 2015
service tax is applicable as it is a declared service so it is taxable
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CA R SEETHARAMAN
(Expert)
18 March 2015
Service tax is payable if service is rendered in taxable territory(in India except J&K) as per place of provision of service Rules. Receipt of money is irrelevant. If the services are received in foreign country it is exempted.
For exempted service see place op provision of service Rules Notification No. 28/2012 - Service Tax.
For exempted service see place op provision of service Rules Notification No. 28/2012 - Service Tax.
CA Sandip Darji
(Querist)
18 March 2015
But We have not hired those professionals we are paying them on behalf of Foreign company.
CA Sandip Darji
(Querist)
18 March 2015
But We have not hired those professionals we are paying them on behalf of Foreign company.
CA R SEETHARAMAN
(Expert)
18 March 2015
No service tax payable if they are employees of the foreign company.
CA Sandip Darji
(Querist)
18 March 2015
They are not foreign Company's Employee neither ours but they work as professional for foreign company.
Only payment for those Professional route through us
and for that we change our margin.
Only payment for those Professional route through us
and for that we change our margin.
CA R SEETHARAMAN
(Expert)
18 March 2015
Service tax is payable by you under reverse charge including your margin amount on behalf of foreign company if services are rendered to Indian clients.
If services are rendered to foreign clients it will be exempted except Online information and database access or retrieval services;
If services are rendered to foreign clients it will be exempted except Online information and database access or retrieval services;
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CA Sandip Darji
(Querist)
18 March 2015
Services are rendered to foreign clients only.
So if it is except than in which rule/Section/Notification.
So if it is except than in which rule/Section/Notification.
CA R SEETHARAMAN
(Expert)
19 March 2015
The place of provision of a service shall be the location of the recipient of service.
As service is provided to foreign clients, it is provided outside the taxable territory hence exempted from service tax.
See the link.
https://www.servicetax.gov.in/notifications/notfns-2012/st28-2012.htm
As service is provided to foreign clients, it is provided outside the taxable territory hence exempted from service tax.
See the link.
https://www.servicetax.gov.in/notifications/notfns-2012/st28-2012.htm
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