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Service tax applicability.

Queries 468 views 4 replies

PLEASE SUGGEST ABOUT THE APPLICABILITY OF SERVICE TAX AND REGISTRATION FOR M PVY LTD.

Eg. M PVT LTD A SUBISDIARY OF N LTD(FOREIGN COMPANY) PROVIDE SERVICE OF TRANING AND FOODING LODGING TO FOREIGNERS AND RAISE BILL TO N LTD(FOREIGN COMPANY) FOR GETING MONEY FOR THE EXPENSES REGARDING TRANING. WHETHER SERVICE TAX CHARGED ORT NOT IN THE BILL AMOUNT.

Replies (4)

yes service tax is aaplicable.

As far as I understood there are two queries

1. Service Tax aplicable on services provided to training, fooding and lodging of foreigner

2. Service tax applicable on service provided to parent foreign organisation.

I am taking second question first, ie Service tax applicable on service provided to parent foreign organisation,

It is well settled that Service provided to self is outside the ambit of Service, but as per third explanation to Section 65B(44) " an establishment of a person in the taxable territory and of his other establishment in a non taxable territorry shall be treated as establishment of distinct person."  Hence in case if office of India is charging to perent company for its service of assistance shall be subject to service tax, if the place of provion of service in India.

Now lets take first question,

Following is my understanding of law,if there is a global agreement with perent foreign company for provision of service and the Indian office os liable or obligue to provide service and place of provion of service is India then Indian office liable to service tax,

Where as under global agreement, the conditions are such that perent company is obligue to provide servie then no service tax shall be levied on service.  

Kindly see Guidence note 5 in CBEC education guide for further clarrification.

THANKS

 

Thanks ankita


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