Applicability of Service Tax on services received and consumed in USA where payment made from India

This query is : Resolved

Satyajit Roy Chowdhury (Querist)
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24 August 2007 Dear Sir,

1. we are engaged in providing various services to our claint relating to computer software devlopment and support services. we are 100% EOU. we have a 100% subsidiary company in USA that provides marketing services in USA.

2. The USA based company provides the following services to us i.e visiting, prospective claints in usa, conducting seminar, exhibition ect in usa, periodic visits to client office for regular follow up in usa & obtaining client feedback, collection of payment ect.

3. In the facts and circumstances stated herein above, we want your clarification whether we, are liable to pay service tax on the services received in usa & consumed in usa as provided by the US based Company.

regards
Satyajit Roy Chowdhury

CA Prasanna Krishnan V

CA Prasanna Krishnan V (Expert)
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18 October 2007 Dear Sir

It has not been mentioned whether you make payment to your subsidiary for the services rendered by them. Further whether the same is on actual expenses based reimbursement or their inflated bills based payment, needs to be considered.

At the outset, service rendered by your subsidiary can be said to have been received outside India and considered as not taxable.