Import Of service.......

Queries 1871 views 9 replies

hi!

Is service availer (an Indian co. ) is liable to pay service tax in India for services availed from a Germen consultent, w.r.t.  GermanVAT on goods lying in wearhouse situated in Germany.

Please, refer section, clause, notification (if any) also,  

Regards

Mohit

Replies (9)

 

It does not matter that registered office in india or anywhere. From which country your taking service is important whether its branch of company.

AGREE WITH MR. PANKAJ

Nature of service is not clear from the query. Anyway, if it is a VAT related consultancy service , there seems to be no direct classification for the service. But if the same is classifiable under Management consultant's service by remote chance, situation of recipient is the criteria. ie. if the service receiver is situated in India , the payment made outside India and the service is classifiable under management consultants, it amounts to import of service and laible to tax in India in the hands of  the service receiver.

Service tax applies to services provided in whole of India, except J&K.....so, in ur case, service is provided in Germany, therefore, not taxable

Refer 'Taxation of Services(Provided from outside India and Received in India) Rules, 2006' for your query. Prima facie it appears that in the given case that the service recipient shall be liable to pay service tax u/s 66A of the Finance Act, 1994.

Refering to Rule 3(iii) of Taxation of Services (Provided from Outside India and Received in India ), it includes Management or business consultants services [sec 65(105)(r)] in its ambit and is import of services if it is received by a recipient located in India for use in relation to business or commerce.

As per the information provided , it seemed the service will be taxable and your co.will have to pay service tax under Reverse Charge mechanism.

what if the service is provided for a project in germany ? destination is not India.Is ST applicable then??

Even then the situs of recipeint is the criteria.
 

What if the payment for services is made in foreign currency?

Does the case of Dabur India Ltd. vs. CCE Ghaziabad have any impact if the service is received outside India but the receipient's permanent place of residence/business is in India?


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