Our firm provides marketing support services to clients based abroad. The services include, inter alia, identification of prospective customers, negotiation and closing deals. The goods are supplied by the exporters/traders directly to the identified customers in India and payment made through approved banking channels directly. Do we need charge Service Tax and from which date. During the current financial year, our year to date receipts are around Rs.5 lacs.
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Applicability of Service Tax
Replies (6)
Dear Mr. Ashok,
The services rendered by you will fall within the ambit of "Business Auxiliary Services".
This is made clear by the notification of the Department. The following is an extract from the notification.
Business auxiliary service is chargeable to service tax with effect from 1 July 2003 and includes, inter alia, any service in relation to promotion or marketing or sale of goods produced or provided by or belonging to the client.
The Board clarified on 20 June 2003 that any incidental or auxiliary market support service provided in relation to evaluation of prospective customer, managing distribution, getting a customer, verification of prospective customer, operational assistance for marketing, formulation of customer service and the like would also be covered under the business auxiliary service.
But the interesting point to note here is that, if your clients are situated outside india, the service rendered by you will fall under "Export of Services".
Service Provided by any person outside India does not attract tax.
Moreover, you have not exceeded the limit of Rs. 7,00,000/-. Only if the gross receipts of your services rendered exceeds Rs. 7 lacs, you need to register.
Mr. Dave,
the ST registration limit is Rs. 9 lacs and not 7 lacs. Also for claiming exemption for export of service you have to comply with some provisions, such as the the export value of service to be received in foreign currency with in 6 months. etc.,
Hi
when a taxable service is exempt under a notification and no service tax is required to pay, registration is reuired or not required ? please answer if you are sure
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