Service tax

HI From what i understand from your post is that an Indian company provides training in Middle east and the Middle east company pays the amount to the Indian Company for their training services. If my understand is correct then no service tax is applicable as the contract / service is provided outside India and the Indian company can claim exemption under export of service. If my understanding is not right or if i have missed any thing; please reply.

Thanks prasad.

What you understood is right. But they are asking for ST on franchisee fees as well as all future payments. Hence the confusion

 

 

Ideally, they are not providing any service in India and hence no service tax is chargable. you can ask them refer export of service rules 2005 or alternatively ask them under what provision of service tax they are charging service tax and repost your quiery.

hello,

 

can any one pls provide the servide tax notes in pdf format to my mail id.

my id: shankarnarayan07 @ gmail.com

Please refer to Para 3 of the Export of Service Rules, 2005 attached below, for "Export of taxable service".

 

To my knowledge, Franchise Service are covered u/s 65(105)(zze) of Finance Act, 1994 as amended from time to time. If we go through the text given in Rules mentioned above, we will find that Section 65(105)(zze) has been kept out of purview of "Export of taxable service". Hence, charging of service tax on Franchise Service seems to be correct on the part of service providers.

 

As far as imparting of training is concerned, Commercial training & coaching centres are covered u/s 65(105)(zzc) of Finance Act, 1994 as amended from time to time. The same has been covered under Export of Service Rules, 2005. Hence benefit of such Rules would be available to that part of service which relates to training services provided outside India.

 

Hope it is clear.