Exemption from service tax

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X Pvt Ltd is exporting sofwares developed by Y Pvt Ltd. X Pvt is receiving the exports proceeds in convertible foreign exchange. so the exports are exempts from service tax in the hands of x pvt ltd. My question is whether y pvt ltd cab also claim service tax exemption since the softwares developed by Y pvt ltd but exports made by X Pvt Ltd.For claiming exemption by Y Pvt Ltd, whether it should receive payments from x Pvt Ltd in foreign currency. Whether both X Pvt Ltd and Y pvt Ltd can claim service tax exemption since same product is developed by one company and exported by another company.
Replies (1)

No Y pvt ltd cannot claim exemption even though it receives payment in convertible foreign currency as it is selling the software to X ltd which is india hence pop in india and taxable. Benefit will be given to only one company which exports the software.


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