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ST to be payable or not? if yes, can we take credit?

Queries 577 views 2 replies

Our company is sponsoring the employees for higher education in foreign countries.  Employees who opted for higher education have to work for the next 5 years after obtaining higher education.  We will directly pay the fees to Universities.  Whether this forex payment attracts service tax under 66A?  If yes, are we eligible for service tax credit?

Replies (2)

my inputs....

i think that u r liable to service tax u/s 66A ....n yes u r eligible to take its credit too as it come well with in the defination of input service....as per cenvat credit rule 2004 ......

one thing i m not sure is whether there is any exemption notification provided for such education to employess..i will update you on that as soon as possible..

Originally posted by : Mallikharjun

Our company is sponsoring the employees for higher education in foreign countries.  Employees who opted for higher education have to work for the next 5 years after obtaining higher education.  We will directly pay the fees to Universities.  Whether this forex payment attracts service tax under 66A?  If yes, are we eligible for service tax credit?

As per section 66A read with service tax rule 2006 (list iii) sponsoring the employees for higher education in foreign countries is an import of service

hence the organisation is liable to pay the service tax on the taxable service provided by Universities in abroad. And the company has to paid the amount of service tax in cash without utilising the cenvat credit .

but the company is very much eligible to avail the cenvat credit of such payment as it is a input service for the company if the company itself is a manufacturer or taxable service provider and liable to pay excise duty or service tax on final product or output service


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