20 February 2009
Service tax is not payable since service recipient is outside India , therefore will qualify for export of services provided payment is received in FE
20 February 2009
Kindly elaborate, u are saying that S.T is not payable since the recipient is outside India on the other hand u suggesting that it come under export of Services as we are recieving the payment in FE agaisnt the bill raised to the foriegn co.
Note : The P. invoice raised to the foriegn company is in Indian Currency and the remmitence is made to our account directly through bank transfer.
20 February 2009
I am not clear as to how you can raise Invoice in INR, you need to convert it in FE to enable transfer of funds.
You are a service provider as per export of service rules, the following is to be complied
rule 3 (iii) In relation to Business or Commerce &Recipient located outside India; in any other case recipient shoule be outside india at the time of receipt of service (for exports) and additiona contion to be complied is
For exports- provided from india and used outside India & payment is received in convertible foreign exchange by the service provider
If you fulfill both the above conditions it is to be treated as export and no service tax is payable
CAclubindia
