Service .Tax liabilty

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Rajan Kapoor (Querist)

07 January 2008 Hi All,

I want to know something regarding service tax.
In case of service tax, if a person in India takes services of any person who is abroad, then the service tax liability is of the service receiver.

Now if an Indian has taken the services in aborad of any agent for arranging Foreign Currency Convertible Bonds and paid the agency commission in aborad out of the funds received through FCCB.
Now the question is whether we had received the services in aborad or India?

Your earlier response will be highly appreciated

Regards,
Rajan Kapoor
CA Final Student

R.V.RAO

R.V.RAO (Expert)

07 January 2008 Services provided by a commission agent are included in the category of taxable service termed as business auxiliary service, which is provided for by the Finance Act, 2004. Service is provided by a service provider who is based outside India to a service recipient who is based in India. Section 66A, inserted by the Finance Act, 2006 read with the Service Tax Rules, 1994 mandate that service tax liability is to be discharged by the service recipient. The upshot of the above analysis is that the indian entity is liable to pay the service tax in the instant case on the gross value of the amount of commission paid to foreign agent.
source:https://students.indlaw.com
R.V.RAO

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