Service tax on it services given from india to foreign clien

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Diwakar Mishra (Querist)
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13 January 2014 Dear Sir/ Madam,

An it company in Gurgaon (Haryana) providing services to foreign client & receiving amount in foreign currency will be exempted from service tax or not.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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13 January 2014 what is the nature of transaction?

Diwakar Mishra

Diwakar Mishra (Querist)
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15 January 2014 Nature is web based services called digital marketing for overseas client.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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24 July 2025 Got it! Here’s the lowdown on **service tax on IT services provided from India to foreign clients** (like digital marketing or other web-based services):

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### Export of Services & Service Tax

1. **Export of Services Definition (as per Service Tax Law)**:
A service qualifies as an **export of service** if:

* The service provider is located in India.
* The service recipient is located outside India.
* The place of provision of service is outside India.
* The payment for such service is received in convertible foreign exchange or in Indian rupees wherever permitted by RBI.
* The service provider and recipient are not related, or if related, the transaction is at arm’s length.

2. **Exemption on Export of Services**:

* Export of services is **exempt from service tax** under Notification No. 25/2012-ST (and subsequent amendments).
* This means, services like your **digital marketing services provided to overseas clients** are exempt from service tax.

3. **Conditions**:

* Payment should be received in **foreign currency** or in Indian Rupees through normal banking channels (as allowed by RBI).
* Maintain documentation proving export of services (contracts, invoices, remittance receipts).

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### Summary for Your Case:

* Your Gurgaon-based IT company providing digital marketing services to foreign clients and receiving payment in foreign currency is **exempt from service tax**.
* You **do not need to pay service tax** on these export services.
* However, you should maintain proper documentation to prove export status.

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If you want, I can help draft an exemption certificate or suggest best practices for documentation to comply with the tax authorities. Interested?

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