Clarification for income tax and service tax

Prasad (Sr. Manager) (617 Points)
Replied 05 April 2012

hi Rishi Answering your questions in the same order it is posted. 1. Since you have indicated that the service / training is used in USA, it becomes export of service, in my opinion no service tax payable, but a registration and reporting (filing of returns required), secondly you could also look at claiming refund of service tax you have paid, like for example you will use a internet connection.... and pay service tax, you could claim refunds on those. you don't require a registration up to 10 L in a Financial year, but you need to apply when your income is at around 9L.

2 Like

valji (Accounts manager-MBA) (2150 Points)
Replied 05 April 2012

AGREEE WITH ABOVE EXPORT SERVICE IS NOT LIABLE TO SERVICE TAX BUT YOU HAVE TO TAKE REGISTERAION NUMBER

1 Like

Rishi (abc) (35 Points)
Replied 05 April 2012

Thanks Parasad and Vilji

I just read service tax rules for export services at https://www.servicetax.gov.in/exp-service-rule.htm an

finmin.nic.in/law/52005servicetax.pdf

Still want to double check if my service comes into this purview.

The online trainings are provided using computer and internet connection to candidates in USA and India. The payments from USA comes into my savings a/c in dollars (later converted to INR) and payments from india students come as INR in the same account.Apart from this, i provided professional services to clients in india for which clients deduct 10% TDS at source.

1) When you guys say, i have to register, what does this mean? reagister a business or service tax?

2) Am i exempted from service tax for candidate payments from INDIA?

3) Am i exempted from service tax for payments from clients within India who alreadty deducted 10% TDS?

4) How to calculate exemption 10 Lacs for service tax? Would it be just professional services income < 10L or salary+professional services income < 10L

Thanks in advance.

Thanks

Rishi

Prasad (Sr. Manager) (617 Points)
Replied 05 April 2012

When we say register, it is service tax registration. you had not mentioned that you provide services in India, yes service in India is taxable. TDS and service tax are two different things. your customers deduct TDS from you and pay to govt, where as service tax you collect from your customers and pay to the govt. it is only the professional income, salary is outside the perview of the service tax Regards Prasad 9845298827

saikiran (CA) (96 Points)
Replied 05 April 2012

Dear Mr. Rishi

Following are the replies for your queries

1) You have to register under service tax. As you are an individual i do not think there is any requirement to register under any law for business. (Assumption you did not hire any employees)

2)You are liable to collect and pay the service tax for the training provided to Indian candidates. If US candidates are in India then even you receive consideration in dollars service tax is applicable.

3)Even TDS is deducted liability for service tax will be there. TDS and service tax are different concepts

4)If the gross receipts in the previous year does not exceed 10 lakhs then in the current year upto Rs. 10 lakhs there will be exemption from service tax.

Please not that: i am not sure whether Rs. 10 lakhs is inclusive of exports or exclusive of exports.

1 Like

Rishi (abc) (35 Points)
Replied 05 April 2012

Thanks a lot ...Prasad and Saikiran for such an exhaustive answers. I understood everything now.

I ll go ahead and register for service tax.

Mr Saikiran

In continuation to your reply, yes 10 lakhs include export services also.

Total - 10 Lakhs (actually 9 :Lakhs 90 Thousand)

1) Export services - 5.5Lacs (Payment in dollars and converted to rupees in account)

2) Export services (Candidates are also in US, but i took mistake of taking money in INR via NEFT from indian accounts) - 4 Lacs

2) India services (Payment in INR) - 50,000/-

So i think for 4 lacs +50,000, i have to pay service tax. My gross receipts last year did not exceed 10 lakhs. So i would be candidate for 10 Lakhs relief this year. Which means i don;t have to pay any service tax (as gross receipts are less than 10 lacs). Is this correct?

Once again thanks for your valuable time and suggestions.

Thanks

Rishi