Service tax applicablity

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Manish (Querist)
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20 September 2013 We are exporter manufacturer. We have received certain design development fee from one of our Foreign Customer to redesign of our existing product. Based on re-design, we will manufacture and export our product to the said foreign customer. As we are service provider in that case, shall we be liable to pay service tax on this “design development fee” received from foreign buyer which is finally to be used in manufacturing and export to the same foreign buyer?

CA Suresh Jain

CA Suresh Jain (Expert)
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20 September 2013 Yes, you are liable for payment of service tax

Manish

Manish (Querist)
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21 September 2013 Even though the payments are received in Forex and the services are eventually used for export purpose only?

CA Suresh Jain

CA Suresh Jain (Expert)
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22 September 2013 I shall reply in couple of days

CA Suresh Jain

CA Suresh Jain (Expert)
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29 September 2013 Sorry for delayed reply.
If all the conditions of rule 6A of service tax rules are satisfied the serrvice tax is not chargeable.
Secondly, you can claim rebate of service tax paid on input services subject to certain condition

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