Go AD-Free with CAclubindia Pro and Daily WhatsApp Updates. Subscribe Now!

Service tax at lower deduction & on softex

Notifications 1092 views 1 replies

Girish

Senior Manager

56 Points Joined March 2012

I am working with a 100% EOU for IT Software Services and we are also registered under STPI, I'd like to know following:

1. Is the export services (software developement charges) taxable under Service Tax Act?

2. Is there any way to restrict my vendors to levy Service Tax on the invoices (Similar to Section 197(1) of IT Act for lower deduction of TDS) e.g. Rent, Transport, consultancy etc.

3. Our Sister Company bills us for the Broad Band Charges & we pay them on monthly basis, do I need to deduct Tax on such O/w remittances?

Thank you in advance

Replies (1)

Arun Kumar Singh

GST Advocate

15220 Points Joined January 2009

Services provided to EOU/EHTP/STP/BTP are not exempt from service tax. Para 6.11(c)(v) of Foreign Trade Policy states that EOU/EHTP/STP/BTP units can avail Cenvat credit of service tax paid. The EOU units can claim rebate of service tax paid on their input services vide rule 5 of Cenvat credit rule.