Service tax is applicable or not?
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
04 April 2013
As per Indian Section of Service tax, those employees who are not working in India, they are not required to pay the amount of Service tax .
Is it true?
Is it true?
CA Himanshu Kansal
(Expert)
04 April 2013
The query is not clear in respect of the question of service in the case of employees.
kindly elaborate the query more.
kindly elaborate the query more.
24 July 2025
The statement that employees who are not working in India are not required to pay service tax is partially correct but needs clarification:
Key points:
Service Tax is a tax on services provided, not on employees themselves.
It is charged on the service provider or service recipient depending on the case, not directly on employees.
If an employee is rendering services outside India (say, working from abroad for an Indian company), then generally:
Service tax may not be applicable on that specific service because the place of provision of service rules under Service Tax Act generally consider whether the service is deemed to be provided in India.
According to the Place of Provision of Services Rules (2012):
If the service is provided outside India, service tax is not applicable.
For example, if an employee is working entirely outside India and providing services from abroad, such services may be treated as export of services and are exempt from service tax.
However, if the service is rendered in India or the service recipient is in India and the place of provision is India, then service tax applies regardless of where the employee is located.
Summary:
Employees working outside India may not attract service tax on their services, provided the service is considered to be rendered outside India under place of provision rules.
Service tax liability depends on the nature and place of provision of services, not merely on the location of the employee.
Key points:
Service Tax is a tax on services provided, not on employees themselves.
It is charged on the service provider or service recipient depending on the case, not directly on employees.
If an employee is rendering services outside India (say, working from abroad for an Indian company), then generally:
Service tax may not be applicable on that specific service because the place of provision of service rules under Service Tax Act generally consider whether the service is deemed to be provided in India.
According to the Place of Provision of Services Rules (2012):
If the service is provided outside India, service tax is not applicable.
For example, if an employee is working entirely outside India and providing services from abroad, such services may be treated as export of services and are exempt from service tax.
However, if the service is rendered in India or the service recipient is in India and the place of provision is India, then service tax applies regardless of where the employee is located.
Summary:
Employees working outside India may not attract service tax on their services, provided the service is considered to be rendered outside India under place of provision rules.
Service tax liability depends on the nature and place of provision of services, not merely on the location of the employee.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Depreciation Chart Companies Act
- EPF ECR NEW FILE SEP 17TH 2026
- Capital Gail Exemption Certificate
- SECTION 393(3) TAX ON CASH WITHDRAWAL
- Under marginal scheme
- Oct 2025 Invoices
- TAX AUDIT ON PROFESSIONAL INCOME
- GST on Renting godown to KFCSC for Storage of Raagi
- Import of Software Service.
- Utilisation Fy 25-26 TDS challans in Fy 26-27 TDS Return
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
