Service Tax towards bill raised to a Foriegn Co.

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This query is : Resolved

Rajat (Querist)

20 February 2009 Is there any Service Tax applicable towards bill raised to a Foriegn Co. towards advt. space sold in an Indian publication?

The Foriegn company does have any base in India.

Dayal

Dayal (Expert)

20 February 2009 Service tax is not payable since service recipient is outside India , therefore will qualify for export of services provided payment is received in FE

Rajat

Rajat (Querist)

20 February 2009 Kindly elaborate, u are saying that S.T is not payable since the recipient is outside India on the other hand u suggesting that it come under export of Services as we are recieving the payment in FE agaisnt the bill raised to the foriegn co.

Note : The P. invoice raised to the foriegn company is in Indian Currency and the remmitence is made to our account directly through bank transfer.

Kindly elaborate

Dayal

Dayal (Expert)

20 February 2009 I am not clear as to how you can raise Invoice in INR, you need to convert it in FE to enable transfer of funds.

You are a service provider as per export of service rules, the following is to be complied

rule 3 (iii) In relation to Business or Commerce &Recipient located outside India; in any other case recipient shoule be outside india at the time of receipt of service (for exports) and additiona contion to be complied is

For exports- provided from india and used outside India & payment is received in convertible foreign exchange by the service provider

If you fulfill both the above conditions it is to be treated as export and no service tax is payable

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