06 January 2010
XYZ is a company based in Germany manufacturing automated folding machine..
ABC (FROM INDIA)assist the sales of these machines in India to end-users. When XYZ sells machines in India through ABC ,XYZ invoice the end-users directly and pay commission to ABC. Also for the spare parts sold to the customers, XYZ pays commission TO ABC.
ABC in turn help them identify customers and inform the same to XYZ. XYZ also provide service to the machines during the warranty period.
ABC RECEIVES commission in foreign exchange
WHETHER ABC IS LIABLE TO CHARGE SERVICE TAX ON ABOVE SERVICE PROVIDED?IF YES THAN IN WHICH SERVICE CATEGORY?
09 January 2010
This is export of service, no service tax is payable. If ABC receives some money in INR directly from customers for providing maintenance/repair, service tax is payable on this amount.
CAclubindia
