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Service rendered out of india

Queries 820 views 1 replies

pramod

Self

24 Points Joined September 2008

We are into software services and we also provide services out of india. I have a situation now and want to find out the tax liablity both from service and income tax perspective.

Customer - USA/Honk kong

PO - Rasied by my customer on my company

Service rendered by - USA or honkkong citizen.

Final payment made by my customer to my indian company.

Now when i have to pay the actual service provider who will be in the forgien country is service tax applicable, also is the revenue generated out of this transaction calls for income tax.

I request all the guru's to kindly advise and will be much obliged.

Thanks in advance for the help.

Best regards

pramod

Replies (1)

Rajesh Kumar

Advocate- Tax

7811 Points Joined December 2008

Examine the question from two angle- firstly your relationship with customer; and secondly your relationship with actual service provider.

In first case, there is no service tax liabiltiy, because even if it is taxable, it is export of services and no tax is payable.

The second part is difficult- the question is are you importing any service from actual service provider. Whe you lok at Import of services rules, you will find as per definition in caluse (ii) of Rule 3, it is not import of service.

In fact is a service rendered outside india. Export of service and rendering service outside India are two different things. In this case of rendering services outside India, provision of service tax is not applicable as laws of service tax is applicable only in India, except J&K.

This article may assist you,

https://www.hg.org/article.asp?id=5977