Service tax on services performed and provided outside india

Hello!

I represent a translation agency in India. I have a question regarding service tax (whether i am liable to or not).

Here is the situation -

1. I have a client outside India who sends me a translation contract to be translated from Language A to Language B. (export of service)

2. I hire a freelancer from outside India to perform this task. (import of service)

3. My client pays me in USD.

4. I pay my freelancer in USD.

The question is that the export of services is exempted from service tax. But import of services is deemed liable. But in my situation, i am importing the services to eventually export the service (translation). So am i liable to pay service tax in India?

Please tell me if i am clear enough or i would explain in more detail!

Thanks

Replies (4)

According to  service tax  rules

"Person liable for paying service tax" means in relation to any taxable service provided or to be provided by any person from a country other than India and received by any person in India under section 66A of the Act, the recipient of such service.

so, you are require to pay service tax on input services.

you can claim that input service credit (CENVAT) with your service tax / excise tax liabilities.

If you are not convinced  with the above, you can approach the tribunal.

can u guide me please in this situation? what is the penalty in service tax when no business started after obtain service tax registration number?
and also nil returns are not filled by the assesse form last 4 years (After obtaining registration number also no business is started)

Export of service is exempted and import of service is taxable in the hands of importer. Take cenvat credit of the tax paid and claim refund.

Answer for Deepa.

No penalty for not starting business after taking registration. File nil returns now. Superintendent has power to drop penalty if situation is genuine.

Thank you so much Sir. it helped :)

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