Service tax on inspection service provided to foreign client

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This query is : Resolved

pawar (Querist)

13 June 2016 Dear Sir,
I have USA based company as client. My client has placed Purchase Order to Indian company (Vendor) who is manufacturing goods in India. Manufacturer (vendor) will export these goods to USA. I will have service contract with USA based company. I will provide inspection related services on the goods being manufactured at their vendor’s premises. My reporting about inspection finding will be directly to USA based company. I will not have any contractual/commercial relationship with vendor. I will have Purchase Order from my client and will receive payment for my services in USD.

My query is on place of provision of service rule 2012. As per rule 4 – Service tax is payable if, place of provision of service, is in India. I need interpretation of place of provision of service. In my case am I providing service within India or outside India? Or rule 4 is not at all applicable for me ?

Do I need to pay service tax or my service can qualify for export of Services ?

Regards

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

13 June 2016 Rule 4 is applicable to you, you need to pay service tax.

pawar

pawar (Querist)

13 June 2016 Dear Seetharaman Sir
Thanks for your reply. I am new to service tax and have read something about it on interent. I want to understand the interpretation of term ' place of Provision of service'. Does it mean 'The actual place where service is provided' or ' The place where service is consumed' ?

Thanks and Regards

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

14 June 2016 It is the place where the service is provided.

pawar

pawar (Querist)

14 June 2016 Dear Seetharaman Sir
Thanks for your reply.. Can I pay service tax after recpt of money from client ? There will be difference in amount actual credited because of fluctuation of exchange rate of USD to Dollor .
Is it possible to share your email address ?

Regards,
Santosh

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

15 June 2016 You can pay service tax on receipt basis provided your service provided in a year not exceeded 50 lacs.
E mail: rseeraman@gmail.com

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