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