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Service tax for providing services to a foreign client

Digitate (Partner) (28 Points)

08 October 2011  

Hi,

We provided design services to a International NGO based in geneva. Do we need to add service tax to the bill amount that we raise. We have the option to raise the bill in INR or Euros. Whatever the billing currency the amount will be transferred in Euros. Please advise.

Thanks

Krishna Kumar

www.digitatemedia.in


 7 Replies

SANJEEV (CA Final (B.COM)) (189 Points)
Replied 08 October 2011

You are Liable to Pay service tax And its mandatory to charge Service tax in billed Amt.

the billing currency amt. can be in Euros or INR but You have Discharge your liablity which is to be calculated On the basis of currency rate On the Date of transaction to Pay service tax in INR

SANYAM ARORA (“It's hard to beat a person who never gives up.”)   (20158 Points)
Replied 08 October 2011

Originally posted by : SANJEEV

You are Liable to Pay service tax And its mandatory to charge Service tax in billed Amt.

the billing currency amt. can be in Euros or INR but You have Discharge your liablity which is to be calculated On the basis of currency rate On the Date of transaction to Pay service tax in INR

agreed

U S Sharma (glidor@gmail.com) (21031 Points)
Replied 09 October 2011

Originally posted by : Digitate

Hi,

We provided design services to a International NGO based in geneva. Do we need to add service tax to the bill amount that we raise. We have the option to raise the bill in INR or Euros. Whatever the billing currency the amount will be transferred in Euros. Please advise.

Thanks

Krishna Kumar

www.digitatemedia.in

for service tax exemption there should be

1) services should be exported / consumed out of indian territory

2) payment should be received in convertible foreign exchange

 

in absence of both above, the service tax liability arise and payable.

CA PRAVEEN SINGH (MANAGER ACCOUNTS) (2277 Points)
Replied 09 October 2011

 

for service tax exemption there should be

1) services should be exported / consumed out of indian territory

2) payment should be received in convertible foreign exchange

 

in absence of both above, the service tax liability arise and payable.


Right Sharma ji..............

SANJEEV (CA Final (B.COM)) (189 Points)
Replied 09 October 2011

The Export Of service tax rules 2005, define the term "export of service" qua each service. rule 4 of export of service Rules specifies the export of service tax without payment of service tax. Rule 5 enable the government to grant rebate which are ultimately Expotted.

It may be noted That the Phrase " Taxable services which are exported" Is not synonymous with the Phrase "services which are exempted" . The service Still continued to be taxed  

Rakesh (Executive- Commercial & CMA final student)   (179 Points)
Replied 10 October 2011

Agree with Mr. Sharma..

You can raise a bill without service tax after ensuring below points

1) You should be able to prove that your services were consumed outside India.

2) You should receive your payments in Euros or any other convertible foreign currency..

CS Bijoy (Expert) (6394 Points)
Replied 10 October 2011

Agreed with Sharmaji.....


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