08 January 2013
The Prop. Company is at Chennai and engaged in providing Information Technology Services to its clients at abroad and the amount has been received in Foreign Currency only.
Is is necessary to charge service tax since export services
thanks for your reply. Please clarrify the following services for charging service tax.
do technical development(For ERP) and support work for the client. The medium of communication is Internet. All the communication, request and delivery are made either by email or Skype. The clients use our delivery(code or idea) for their internal use in his database inside there own country at aborad.Payment is received from abroad in foreign currency. pl clarrify whether to charge service tax or not to charge since export of services
Technical Development and Support work for the client fall in Rule 3 of the Place of Provision of Service Rules,2012. The Transaction is not taxable in India since the Place of Provision of Service is location of the Service Recipient ie out side the taxable territory. From 01-07-2012 Rule 6A has been inserted and if the Service has been provided or to be provided outside the taxable territory then no Service tax attracted on the transaction.The Receipt of foreign currency is only relevent for claiming Export Incentive. See Rule 6A of Service tax Rules and Rule 3 of POPS Rules,2012.
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