Is paypal account transfers are service taxable?

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prasad

manager

78 Points Posted on 01 October 2011

Dear All,

We provide software services to our overseas and Indian local clients. Ours is a software private limited company. We have following queries regarding the service tax.

1. If our clients pay us through PayPal then tell us whether this amount comes under service tax?

(a) We'll pay commission to a firm, which isa parnership firm that acts as a mediator between our clients and us. We would like to know whether this commission also be under service tax? If so, how much it will be?

(b) Only one partner from this partnership firm works for us. If we pay the commission to him as a consultant then how much service tax is applicable?

Kindly provide answers question wise. Thanks in advance.

with rgds,

Prasad

Replies (3)

Milan Somani

911 Points Posted on 01 October 2011

1. Amount recieved in paypal account is not liable to service tax.

2. Please calrify the following points:

Is commision paid in Dollar?
Is commision paid abroad via paypal ?
Is the money received in paypal is after charging commision ?

prasad

manager

78 Points Posted on 01 October 2011

Dear Mr.Milan,

Thanks for your reply.

The commission will be paid in Indian Rupees after we receive the money in dollars from the client.

with rgds,

Prasad

Milan Somani

911 Points Posted on 02 October 2011

In case of commissions agents, with respect to the export trade, the services are provided outside India. When services are provided outside India, where the provision of service tax doesn’t stand, no service tax is payable.