Dear Friends!
We provide consultancy service on environmental issues to Sikkim government. And for that we raise invoices in Indian Rupees and the payments are received in INR and service tax is charged on all invoices as per applicable laws of service tax.
We have a joint venture partner who is of Japanese origin and they also provide the consultancy service to Sikkim government and raise their own invoices in their own name in Japanese Yen and the payments are credited to their Bank of Tokyo A/c in Japan; though the payments for the invoices are to be credited.
They do not have any permanent establishment in India; their consultants come to India on a temporary assignment and sit maximum of 120 days in a calendar year in our office at Sikkim.
They do have a PAN number in their name but applied on the basis of address of their country of origin i.e. of Japan.
The issue is: Are they liable for service tax provided they do not have any permanent establishment in India? If they don’t, then who is liable in that case? Is it Sikkim Government who is the service recipient here?
But in that case: will the Sikkim Government will agree for payment of service tax for the invoices raised from Japanese firm? What will be the procedure and action in that case will be on the part of Government?
I need your valuable advice in this case.
Thanks
Best Regards
Sunit Acharya
The Louis Berger Group Inc.
CAclubindia
