Service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 December 2012 Hi,

From overseas & local if we received some lift doors materials for rework and some parts replacement which we didn't manufacture. Could we raise the service tax invoice @ current rates 12.36% for local? and what we will do for overseas what and all documents required.

Thanks,
Indu

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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01 December 2012 For local services you will charge full service tax.

Service tax on export of services is exempt.

Querist : Anonymous

Querist : Anonymous (Querist)

01 December 2012 Ok Thank you. Well noted your points but for overseas what and all documents are required.

Thanks

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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24 July 2025 You're welcome! Let's clarify your query point by point.

🔍 Context Summary:
You’re receiving lift doors/materials (both from India and overseas) for rework or part replacement.

You want to know:

Whether service tax is applicable for local (India) jobs – ✅ Yes, at 12.36%.

Whether to charge service tax for overseas jobs – ✅ No, if it qualifies as export of service.

What are the documents required to support export of service – 📄 Detailed below.

✅ 1. Local Rework – Within India
You are rendering a service (rework/repair) in India to an Indian client.

✔ Charge 12.36% service tax (as per rate in FY 2012-13).
✔ Raise a tax invoice under Section 65(105) of the Finance Act, 1994.
✔ Claim CENVAT credit (if eligible) on inputs or input services.

✅ 2. Overseas Rework – Export of Service
As per Rule 6A of Service Tax Rules, 1994, and Export of Service Rules, 2005, service is considered an export (and thus not taxable) if the following 5 conditions are satisfied:

📌 Five Conditions to Qualify as Export of Service:
The provider is located in India.

The recipient is located outside India.

The service is not specified in the Negative List.

The place of provision is outside India (as per Place of Provision Rules, 2012).

The payment is received in convertible foreign exchange.

📄 3. Documents Required to Support Export of Service (No Tax Applicable)
📁 Document 📌 Purpose
Export Invoice (without ST) Must mention “Export of Services – No Tax Payable”
Foreign Inward Remittance Certificate (FIRC) Proof of receipt in convertible foreign exchange
Bank Realization Certificate (BRC) Proof of export earnings (used by ST/excise dept)
Copy of Purchase Order / Work Order Shows contract is with a foreign client
Proof of Delivery / Work Completion Like shipping documents or inspection reports
Declaration under Rule 6A/ST Rules Stating that service qualifies as export

✅ No need to charge or pay service tax on export of service.
🔁 You may also claim refund of input tax credit under Rule 5 of CENVAT Credit Rules.

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