Service tax guidance for an it firm/company

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Ishan Gupta (Querist)

23 December 2012 Hello Sir/ma'am

I am running an IT firm situated in Chandigarh and having a tough time figuring out if I come under Service Tax for my services! especially after the amendments in Service Tax act in Jun/Jul 2012.

Nature of services:
The service is IT consulting, Internet Marketing and website development.

All the services are provided to my clients in US, France. No services are provided in India(locally).

All the payments are received in dollars or Euros in the form of an inward remittance in my bank account.

Are these services still considered as the Export of Services?
Am I still eligible for service tax exemption.

This question might have been asked a couple of times in the forum already! I am sorry if this is a repeat question but I did try to find an answer by searching the forum and was not able to get a definitive answer.

Thankyou much
Ishan Gupta

Kaushik Vinod

Kaushik Vinod (Expert)

27 December 2012 Dear Ishan Gupta,

As per Place of Provision of Service Rules, 2012 your two service are covered under rule 03 of above rule and are provided out of taxable territory then no question of service tax arising.
But the marketing services are covered in Rule 9 of place of provision of Service rules, 2012 and place of provision is location of service provider and it is taxable under the service tax .
Also see Rule 6A of Service tax rules,1994

Crux:If the Service has been provided outside taxable territory then no question of Service tax and no requirement to receive the amount in foreign currency ( To claim certain export incentives you are required to receive the amount in foreign currency among other thing)

Thanks

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