Place of provision of service rule

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Prodip Das

180 Points Posted on 20 December 2012

A Company has got an order to sale Machines on ex work basis in India which are basically to be imported from outside india.

1) The company has a negotiation with a firm outside india who will take care all the relevant work like dismantle of machines, FOB, handing chages, shipping the machines into india and get consideration in foreign currency for providing such services.

2) The company in india will sale the machine on ex work basis under foreign currency in India and also charge service bill for irrection,commissioning or installation services.

So what would be the service tax implication under the above circumstances??

Replies (3)

Rakshit

practising

426 Points Posted on 21 December 2012

As per the current laws, you will need to pay Service Tax on the amount paid by you to such foregin company for the services of dismantling of machines, FOB, handling charges etc.

With respect to the seocnd transaction of selling such machines in India and raising the Bill of erection, commissioning and installation, you need to charge Service Tax on such bill of erection, commissioning and installation.

However, you can avil credit of such Service Tax paid on the amount given to such foregin company and utilise such credit against the payment of Service Tax on bill of erection, commissioning and installation.

Raksh*t Verma

8800615751

dismantle of machines, FOB, handing chages, shipping the machines into india

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