Service tax on export of services.

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Sushant

Sales Manager

25 Points Posted on 14 December 2015

Hello Sir/ Madam,

I am working for a company based out of USA. They are the manufacturers of a specialized product in Audio visual industry.

I am based out of Mumbai and work in India for that company.

My work profile - I search clients for that company in India. The clients in turn send in the purchase orders and payments on company's name through internet and the company in turn fulfills the orders and delivers the shipment directly to the customer in India.

In return , I get commissions and monthy renumeration in USD.

I am reading various articles and notes on export of services but i was not able to find relevant example matching mine.

As per the Export of Services Rule -

I receive foreign currency & recipient is located outside India. But i am not sure if i satisfy rest of the exemption rules.

Accordingly to my analysis, i should be exempted but i was experts opinion so it will be of great help if you guys can guide me.

Please ask me questions if my information is incomplete.

Thanks & Regards,

Sushant

Replies (6)

Madhukar N Hiregange

Chartered Accountant

33545 Points Posted on 15 December 2015

From Ocotber 2014, the intermediary is liable based on location.( Rule 9 of Place of Provision of Services Rules) In your case it is India. Therefore liable after Rs. 10 lakhs.

Sushant

Sales Manager

25 Points Posted on 15 December 2015

Thank you for your reply Madhukar Sir.

Can i be employed with that company or can i work as a consultant with that company.

Right now i get monthly compensated as an employee plus my commissions.

The commissions are based on the cost of the traded goods and the compensation is to take care of the expenses and monthly living.

Ajay Chandramouli

Article Assistant

324 Points Posted on 15 December 2015

Hi Sushant,

If you are the employee of the company and exist under their payrolls getting TDS deducted under salaries then yours is not a service as the service defifniton excludes services of employee to employer.

Suppose services provided in the capacity other than employee will attract service tax

Manoj BG

Tax Professional and in Service

1637 Points Posted on 15 December 2015

Providing service in capacity as an Employee would not liable for service tax whether or not you are receiving commission in USD. However, if you work as an independent consultant or any other name (i.e. other than as Employee), it would attract service tax even though commission received in USD as per Rule 9 of POPS Rules. However, you are eligible for SSI exemption limit of Rs.10 lakhs in case you are liable to pay service tax, as suggested by Mr. Madhukar