service tax on export of services

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CA Sohrab Khan

Practice

33 Points Posted on 24 November 2008

A proprietorship firm provides BAS.The firm has tie up with Abroad Universities in U.S, Australia,Canada etc.

1)They send students to Abroad for studies and receives commission from the universities to which such students are admitted.The commission received is in Foreign currency.

2)The firm sometimes directly collect commission from the students in indian currency on the condition that they will not receive any commission from the abroad university to which the student is getting admission.

In both the cases the student is send to abroad universities,does both the conditions come under Export of Service,Does such receipt of income attract service tax.Kindly help by your suggestions.

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Posted on 24 November 2008

Originally posted by :Sohrab Khan
"	A proprietorship firm provides BAS.The firm has tie up with Abroad Universities in U.S, Australia,Canada etc. 1)They send students to Abroad for studies and receives commission from the universities to which such students are admitted.The commission received is in Foreign currency. 2)The firm sometimes directly collect commission from the students in indian currency on the condition that they will not receive any commission from the abroad university to which the student is getting admission. In both the cases the student is send to abroad universities,does both the conditions come under Export of Service,Does such receipt of income attract service tax.Kindly help by your suggestions.	"

Your question consists of two part. One part where the commission is received in convertiable foreign currrency. In this case this can be recognised as export of service. But in another case where the commission is received in India. It is not coming under the definition of Export of service. Because one of the condition to be fulfilled so as to term as Export of Service is that the remittance shall be in convertiable foreign currency.