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Service tax on export of services

CA Sandeep Bhatnagar (Practice) (1121 Points)

05 October 2007

Can someone please clarify on the following :

If a service provider exports some services without charging service tax and also imports some services from the same concern and the account is squared up by book entries and the balance is paid/received as the case may be. Whether benefit of exemption from service tax would be available in the case of export of services ?

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4 Replies

vaibhav (66 Points)
Replied 13 November 2007

No Dear? Does law allows this?? Not at all. You have to follow all procdures? On import of duty, u r required to pay Service Tax.

CA AYYAPPA (Chartered Accountant) (272 Points)
Replied 14 November 2007

In u r query 2 cases are there case 1: export of services is exempt from service tax provided the money is received in foreign currency and followed export rules. case2: Import of services, service tax has to be paid by the receiver as per the rules. (Import rules) (nothing to do with the squaring of accounts, but it has to be checked whether it is allowed as per FEMA[any other act] or not)

(Guest)

Case 1: Export of service is not chargeable to service tax. As per Notification No. 40 & 41 deals with refund of service tax in case of export of services. As per notification no. 40 & 41 you can claim refund but before that you have ti pay service tax for certain services like GTA, transporation thriugh Ship, Testing and inspection sservices. Case 2; In case of import of service provision of Sec 66A is applicable. As per sec 66A, you have to pay service tax on the imported services. You cannot set up the amount of import & export. For more information Contact me at No. +919903616373