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Help needed for service for tax query

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sasideep reddy alla

2 years of experice as an Accountant

25 Points Posted on 07 December 2012

Dear All,

we are a Software company situated in India and we provide software services to a company situated in abroad and for this monthly we will raise invoices and they will make payment accordingly.

What will be the effect if they remit the amount in Foreign Currency / Indian Currency.

Shall we need to Pay Service Tax.

Thanks in advance.

Regards,

Sasideep.

Replies (2)

Dipjyoti Majumdar

CA in service & CS. dipmaj@

2886 Points Posted on 07 December 2012

Export of Service is outside service tax levy. But for a service to qualify as Export you need to comply with Rule 6A of Service Tax Rules 1994 as amended till date read with POPSR 2012 effective 1 July 12.

In a nutshell, the payment has to come in convertible FC to your bank account, otherwise it will not be an export. If not export, pay output service tax.

Priyanka Maheshwari

Assistant Manager

76 Points Posted on 08 December 2012

Would just like to add to Mr. Dipjyoti's reply, The convertible FC should be among those as specified. Any FC would not suffice to classify the transaction as an export.