preparation of study material

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Shubham Singhal (Querist)
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20 October 2016 Guys, need ur advice Suppose, An US entity asks an Indian pvt ltd co. to prepare some teaching material (study material) for them and that company makes and gives. So what is the legal obligation on indian company? Do indian co needs IEC code or Will it be sufficient if indian co raise an invoice of service value + service tax

Shubham Singhal

Shubham Singhal (Querist)
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21 October 2016 pls advice asap

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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10 August 2024 When an Indian private limited company provides study material to a U.S. entity, several legal and regulatory aspects need to be considered:

1. **Invoice and Service Tax:**
- **Invoice:** The Indian company should issue an invoice detailing the service provided, the amount, and any applicable taxes. The invoice should include the service value and, depending on the nature of the service, Goods and Services Tax (GST) or its equivalent, as per Indian tax regulations.
- **Service Tax:** As of July 1, 2017, service tax has been replaced by Goods and Services Tax (GST). For international services, GST may not apply, but the company should be aware of the specific GST rules for exports of services. Typically, services exported outside India are zero-rated under GST.

2. **IEC Code:**
- **Import Export Code (IEC):** This code is required for entities involved in the export and import of goods and services. For the Indian company providing study material to a U.S. entity, an IEC is generally required. It ensures that the company is registered for foreign trade and complies with Indian regulations regarding export services.

3. **Export of Services:**
- The Indian company needs to ensure that the service provided qualifies as an export of services under Indian GST law. According to GST regulations, an export of service is considered a "zero-rated supply," meaning the company can claim a refund on input taxes paid. The company must ensure that they fulfill the conditions for zero-rated exports, such as having a proper export contract and proof of payment in foreign currency.

4. **Compliance:**
- **Documentation:** Ensure that all relevant documentation, including contracts, proof of payment, and correspondence, is properly maintained. This is important for regulatory compliance and potential audits.
- **Tax Filing:** The company should correctly file GST returns, reflecting the zero-rated export of services. Ensure that all documentation supports the claim for zero-rated supplies.

In summary, for the Indian company to legally provide study material to a U.S. entity, it should issue an invoice (with applicable GST considerations), obtain an IEC code, and ensure compliance with export regulations. It’s advisable to consult with a tax advisor or legal expert to ensure all regulatory requirements are met and to handle any specific nuances related to international transactions.

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