Facts of the case:
- ABC Pvt. Ltd. (Our Company) is a 100% subsidiary of our parent Company, XYZ Pte. Ltd. of Singapore. XYZ purchases from its parent company, the main hub in Switzerland who manufactures the machines.
- ABC was established in order to enable XYZ to market its range of machines in India, act as a facilitator for sale and to provide technical support through our local engineer employees (like installation of machine), spare parts and after-sales service to the customers in India.
- For sale of machines, ABC identifies prospective clients in India, make an offer for sale of our parent company and ultimate sale takes place between XYZ and the customer in India.
- As per our revenue sharing agreement with XYZ, ABC get to earn Actual Profit/(Loss) on the Sale of the machine which is remitted by XYZ to ABC.
SERVICE TAX IMPLICATIONS QUERY
- Uptill now, we are showing this inward remittance as not liable to service tax as recipient of service, XYZ is located outside India and is in non-taxable territory.
- W.e.f. 01/10/2014, I believe there are some changes in "provision of Service rules". So, please advise is Service tax applicable on our inward remittance? Are we covered as "Intermediary for supply of goods" ?
CAclubindia
