07 June 2010
My client is having his office in India and is providing services for a US based concern . The services rendered by the client is business support services like marketing , quality control etc for which all the expenses for setting up the office and the running expenses are paid in advance by the US based conmany.
Query : Whether service tax is applicable on such services if the client is rendering services only to the US based concern and not to any other client locally.
If applicable, whether service tax is applicable on the amount of reimbursement also or only on the service charges.
The classification of your service is depending on nature of service provided; your service may classifiable under Business Support Service or Business Auxiliary Services.
In case you are satisfying export condition laid down in Export of Service Rules, you can export service without payment of service tax.
It is pertinent to note that in case you are export services then you can claim refund of unutilised Cenvat credit under Rule 5 of the Cenvat Credit Rules read with Notification 5/2006
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