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Is service tax applicable on invoices raised on us customer?

961 views 2 replies

durga

sales manager

29 Points Posted on 22 March 2013

Hi,

we are a recruitment firm based in Mumbai. We are going to raise an invoice to a US client ; based in USA payable in US $ ; directly to our bank account in India.

The payment is going to be made in 2 parts : 30 % in April 2013 & balance 70 % in Dec 2013.

Had a query:

1) do we have to include service tax on the above invoices?

2) Is this payment received in US $ income tax exempt?

Would appreciate your feedback asap.

Regards,

Durga.

Replies (2)

Guest

You will have to pay service tax on their behalf... its a case of reverse charge.....

Prabhat Kumar

Advocate & Consultant

1912 Points Posted on 22 March 2013

In case service provider and service recepient both are located in the taxable territories[and you are individual,H.U.F,Partnership Firm etc. as per notification no.45/2012 dated7.8.2012 then the ratio of the service tax under reverse charge method is 25% and 75% respectively.But in your case recipient is located in non taxable territories and you are located in taxable territories and payment for your service is received in foreign convertable currency,you are not liable for Service Tax as it is Export of Service.