Service tax exemption for website development and seo servic

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Kiran (Querist)
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19 August 2015 Hi,

we are planning to start a web designing, development and content writing business as a partnership firm. We provide these for clients in US and we are not working for any Indian clients. The client pay via wire transfer as convertible foreign exchange. The transactions will be above 10 lakh per year.

Below are the doubts I have:

1) Will all these services we provide come under tax exemption considering as exports?

2) Is website designing, development etc a service or a product?

3) If it is a product, will we come under service tax exemption

4) As of now, we are planning to provide as a service and is planning to charge the client for the number of employees we hire to work for him. for eg, if he wants 5 people, we will charge him 500$ per person and total 2500$. that way. If we do it like this, can we get a service tax exemption?

Please let me know the details ASAP. We are stuck on this and we need to start the firm by next month. thanks

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 August 2015 1 Yes these services are exempted as per place of provision of service rules.
2 It is a service.
3 NA
4 Service tax not applicable.

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Kiran

Kiran (Querist)
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19 August 2015 Thanks Seetharaman Sir. The problem we are facing now is, we talked to the service tax people and they exactly don't know if they can exempt us from the tax. They aren't giving us a confirmation. We are worried about this because we can't say the client that they have to pay another 14% extra as tax. they wont agree on that. Any advise on how we should proceed?

Thanks

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 August 2015 As per place of provision of service Rules 3, the place of provision of service will be out side the taxable territory so it is exempted. You can proceed with start of business.

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