i am working in a call centre,its a subsidiary of US inc.we just raise an invoice against the us Inc only.we have no direct payment from the clients.we followed cost plus method.all service tax we paid on input services can we get refund .please give me proper advice
23 November 2007
BPOs providing services to international clients pay service tax on inputs and then claim refund while domestic call centres who provide services to their clients were suppose to pay tax on input services. But since there was no service tax on output services, the setting off of input tax, was not possible. So, the exemption was granted to them through a notification. The notification exempting domestic call centres from paying service tax has been revoked.
For example, if a bank has a call centre, the call centre charges bank Rs 100 for input services for which service tax will be charged. On the output side, the bank charges Rs 1,000 from its customers but not all the bank services are taxable.
So if services of Rs 500 are taxable at 12% which is Rs 60. Now, 20% of Rs 60, which is 12 will be the input tax credit claimed by the banks. Thus, cost will go up marginally because most people will be able to claim input tax credit,
You may evaluate your postion in light of the above clarification
However should you need additional clarification you need to elaborate your query in detail
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