26th August 2013
ABC is a company based in India manufacturing automobile components. It is regularly exporting its products to its customer based in USA.
XYZ is a Logistics Company based in USA and does not have any office or permanent establishment in India. For the purpose of taxation XYZ is a Tax Resident of United States of America.
As per terms of the purchase order of the customer the components and parts exported by ABC will be first delivered at the place of XYZ (logistics company). The customer will take delivery of the components from the logistics company whenever he is in need of the same for his production requirements.
It shall be noted that the logistics company (XYZ) is a company operating from an non taxable territory (USA) and the services are also rendered in a non taxable territory (USA)
Members of the forum are hereby requested to clarify whether the above services availed by ABC will come under the purview of service tax. Whether ABC has to pay service tax on reverse chargeable basis on the services availed from a company based in USA.
If Service Tax has to be paid then at what rates the same is to be paid and whether the said amount can be availed as input credit.
With regards
Muralidharan
CAclubindia
