Service tax on accounting work done at India

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 December 2010 Hi,
If we are providing the accounting work at India for our clients located out of India Is Service tax is going to be applicable on the invoices we will be raising to our clients situated abroad.Please reply asa possible.

CA Sanat Pyne

CA Sanat Pyne (Expert)
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14 December 2010 The Export of Services, Rules, 2005 specifies 3 categories of cross border transaction of
services and conditions that will be construed as export of services in cases of:
i. Specified services which are provided in relation to immovable properties
situated outside India – [See list of services in Appendix-4] (Refer Rule 3(1)(i) of Export of Service Rules,2005).
ii. Specified services which are partly performed outside India – [See list of
services in Appendix – 4] (Ref. Rule 3(1)(ii) of Export of Service Rules,2005).
iii. the remaining taxable services, barring a few exceptions, when provided in relation to business or commerce, to a recipient located outside India, and when such services are provided not in relation to business or commerce, it should be provided to a recipient located outside India at the time of provision of such service.
However, where such recipient has commercial establishment or any office relating thereto, in India, such taxable services provided shall be treated as export of service only when order for provision of such service is made from any of his commercial establishment or office located outside India. [See list of services in Appendix – 4] (Ref. Rule 3(I)(iii) of Export of Service Rules,2005).
Further condition to be met for treating the provision of any taxable service as export of service -
payment for such service is received by the service provider in convertible
foreign exchange.
[Ref. Rule 3(2) of the Export of Service Rules, 2005].
Thus, each transaction has to be seen individually to ascertain if it constitutes export of services, fulfilling the requisite parameters.