Is service tax applicable for sales outsourcing in india ?

Hello,

I am running a software company and planned to outsource my sales process to a chennai based contractor, who will charge me on monthly basis(INR 40,000). We will enter into an agreement of minimum of 6 months. So for 6 months the total amount will be around INR 2,40,000.

I just want to know if I have to give him service tax for this consulting job or not? If yes then how much, and how do i know if he is actually depositing the tax taken from me or not.

I am in a hurry, need to sign the contract by next 2 days, so please help me with my concerns.

Thanks

Tapan kumar

Replies (1)

No service tax liability if he is availing SSP exemption.

Otherwise he will have ST registration number and will charge 15% ST over and above the bill amount

Also refer: 1. https://www.cbec.gov.in/resources//htdocs-servicetax/st-profiles/it-sw-services.pdf;jsessionid=47C34CAD8F9BD45892A26D1760D80670

2. https://gstindiaguide.com/information-technology-software-services/.

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