Taxaiblity of service

IF THE NATURE OF SERVICE IS TAXABLE SERVICE

THEN IT IS TAXABLE

CHECK FOR EXPORT INCENTIVES

The recent judgement of tribunal in Microsoft's case supprots the view of Mr. Kiran. It is not an export of service.

Hi,

I was told that services are exempt as per the cirular issued by the dept. The relevant cirular is 111/2009.  To have more clarity on my query my client does implementation of a product developed by a company in UK. The implementation is done for a UK clients company in India. My client raised invoice on UK Company in convertiable foregin exchange. I think in light of the said circular the same is exempt....

Two possible arguments as under:

The service could fall under erections installation commissioning services which is a performance based service. That is to say only if the service is performed outside India would it be considered as an export. In this case not export.

However in this case the service is provided to the client in UK therefore the service maybe one where service is provided on behalf of another under BAS.  BAS is on recepient based service. In this case the service though conducted in Idnia is for the recepient outside India. In this case export.

Matter is not clear. Dept circular indicates where the benefit accrues. In this case benefit accrues in India. Maybe better to err in this side. If not paying may intimate the reasons in writing to dept and obtian dated acknowledgement.