Doing business with a us company for their india office

493 views 2 replies

Mayank Sinha

Others

25 Points Joined December 2012

All,

We are trying to work with a company based out of US. The desired process is, that the client from US want us to provide a quote in USD to him and ship some material and render some of his services for his India office. The client from his US company will issue us a PO in USD.

Is it allowed for us to raise a USD quote for a US based company and supply goods and services to their India office and later invoice the US company in USD.

Also what would be the tax rate (VAT & Service tax) involved in this ttransaction?

There is no custom duty benefit availed in this deal.

Thanks in advance for your help.

Mayank

Replies (2)

Rikin

Learner

140 Points Joined August 2008

For Service Tax :when service is provided outside india (US in current case)...payment liability is on service provider...you must calculate gross amount of USD bill into INR...and pay service tax.

I dont know about VAT provisions for exports of material and waiting for another answer.

Thanks and Regards.

Mayank Sinha

Others

25 Points Joined December 2012

Thanks for the info.

Tax benefit is not is question here, client is willing to pay the local taxes (though in USD).

However my main concern is, if this is legal transaction?

i.e. Accepting a PO from US company in USD -> Delivering equipment and services in India -> Invoice the US client in USD including local taxes, i.e. VAT, Service Tax & Octroi in this case.

Thanks,