Reg. Export of Service

This query is : Resolved

Gourav Aggarwal (Querist)
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03 February 2011 My query is:

My client is provider of survey and map-making services. A Hongkong based company has given contract for survey work in Africa to a Indian company say 'ABC Limited' and further ABC Limited has given sub-contract to my client. ABC Limited has office in Africa also. My client will go over to Africa to undertake the survey work and will submit the complete maps and survey reports at Africa office of ABC Limited. My client has an option to raise invoice in favour of ABC Limited either at Africa address or India address. Please tell me the taxability of service in both the scenarios. i.e. if my client will raise invoice at any address will service tax liability arises or not.

Thank you very much in advance.

VIPIN KUTUMBALE

VIPIN KUTUMBALE (Expert)
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18 February 2011

SERVICE TAX IS BASICALLY CONSUMPTION BASED TAX, We have to find out who is ultimate consumer of the Service. In view of above service provided by your client is consumed out side India. you have to raise bill out of India and Foreign Exchange should be received by your client to avail the export exemption

Vipin Kutumbale

Ashok Asthana

Ashok Asthana (Expert)
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24 February 2011 The export of service rules clearly specifies that services are to be provided outside India (excluding Nepal & Bhutan) and the payment should be received in convertible foreign exchange through banking channels, In this case your client MUST raise invoice on African office.

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