Service tax on usd billing to indian company

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 November 2014
We are providing the erection and commissioining services to an Indian Company. The site of Indian Company is out side Indian teriitory. The Indian Company is receiving the payment from foreign company in USD.

Query-1: If we raise the bill in UDS to Indian Company and receive the payment in USD then should we charge the service tax.

Query-2: If we raise the bill to Indian Company in INR then service tax to be charged or not.

Amol S Joglekar

Amol S Joglekar (Expert)
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14 November 2014 What is your query? Who is receiving payment in USD? It appears that SERVICE RECEIVER is getting payment. Can you please clarify who is this "WE"....foreign company or Indian Company?????

Querist : Anonymous

Querist : Anonymous (Querist)

14 November 2014 We are the Indian Company (A). We take the order from Indian Company(B) for delivering the erection and commissioining services outside India to the foreign customer (C) of Company B. "C" will pay to "B" in USD.

Now My Query is that :
(1) Can Company(A) raise the invoice to Company (B) in USD without charging service tax
(2) Can Company(A) raise the invoice to Company (B) in INR without charging service tax

Amol S Joglekar

Amol S Joglekar (Expert)
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14 November 2014 The service is delivered outside the taxable territory and hence not taxable.

Querist : Anonymous

Querist : Anonymous (Querist)

15 November 2014 In our case we are considering the foreign company C as service recipient for Company B. Whereas the Company B is receiving the payment from Company A.

Who is the service recipient for Company B, Whether it is company A or Company C.

If service recipient is company C then it is ok. If recipient is company A then as per rule 8 this service is taxable.

Please advice

Amol S Joglekar

Amol S Joglekar (Expert)
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17 November 2014 Co A - Service Privider
Co B - Service Receiver
Service is received OUTSIDE India.
Hence not taxable.

Querist : Anonymous

Querist : Anonymous (Querist)

17 November 2014 But as per Rule-8 of POT Rules, I the service recipient and service provider both are situated in taxable territory the service is taxable in India.

If the service recipient id Company C, then we can say that Rule - 8 is not applicable.

Please advice.

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