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Service tax on tour/ travel services

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Sowmya.S.Balan

Paid Assistant

283 Points Posted on 11 August 2011

Dear Sir,
We are providing Tour/ Travel agents service. We are collecting service tax from parties @ 2.575% i.e(after abatement of 75%).
We got US dollars for services and we have opened an account in India in US dollar and we have credited the same in the USD account. We have converted a portion of the same into Indian Rupee and transferred to our regular bank account. We paid service tax on the amount so converted. Whether we are required to pay service tax on the full amount deposited in our USD account.or any exemption available . if any exemption available please quote the notification no also.

Please give me urgent reply

Replies (2)

SIVA KUMAR

CA Final Student

56 Points Posted on 11 August 2011

Yes, you have to pay service tax on the full amount converted into Indian rupee. There is no exemption regarding escape from service tax.

CA Unnikrishnan Nair N

Chartered Accountant

2114 Points Posted on 12 August 2011

If the services are performed out side India wholly or partly and if payment has been reeived in foreign exchange, it is export of service and no service tax is leviable on such services. Conversion into rupee after receipt of the USD in India makes no difference.