Service tax on Export Service

Queries 939 views 3 replies

Hi

I need a clarification on service tax on software service exports.  I have a client in US want me provide software testing of their product. They will ship the product on a returnable basis.  I have to test it using software (that also they will provide) and report the test results back and also return the product after that.

Is this activity service taxable in India ?. 

Appreciate input

Thanks
Ignesius

Replies (3)
Originally posted by :Ignesius
" Hi

I need a clarification on service tax on software service exports.  I have a client in US want me provide software testing of their product. They will ship the product on a returnable basis.  I have to test it using software (that also they will provide) and report the test results back and also return the product after that.

Is this activity service taxable in India ?. 

Appreciate input

Thanks
Ignesius
 
"

You fall under eligible SERVICE TAX PAYER under EXPORT OF SERVICE Rule
 

 

Your will get following three options for paying the SERVICE TAX

 

(a)   Export without payment of service tax and utilise Cenvat Credit for payment of service tax on other services

 

(b)   Export without payment of service tax and claim rebate of service tax paid on input services and excise duty paid on inputs (or forget about rebate as procedure is too complicated and impractical)

 

(c)   Pay service tax on exported services and claim rebate (by this, he can utilise his input credit)

 

Hi

Thanks for the response. The query I posted in-fact  is a descripttion of a segment of software/IT exports.  From your response, I could conclude that all software activities happening in India for export purpose is service taxable and the companies can get rebate/claim as you have described,   Is this the method followed by our software exporters like Infosys, TCS, Wipro etc.,  Are all the software export work done by these companies in India are falling with service taxable regime ?. 

Thanks - Ignesius

 

I requst you to go throug the following site for all the answers you need

https://www.dateyvs.com/service07.htm


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