Credit of Tax

This query is : Resolved

Guest

Guest (Querist)

18 December 2008 Can you examine from a service tax angle the following proposition:

A Company will contract with local vendor ( contractor) who will provide Human Resources -
These resources will go onsite and work on the Company's client locations -

Contractor will invoice the Company for the cost of resources in INR- local sales

Company will invoice in US$ the onsite Company's entity at cost plus statutory markup- export sales

Questions:

Can the contractor avoid invoicing the Company without Service tax since the resource is working Onsite ( deemed export ?)

Can the Company take duty credit/refund for the service tax paid on the contractor bill, since it will be exporting these services?

Can the Company utilize the service tax paid on contractor bill for adjusting with service tax liability on Import of Other services – ie on Finance Shared Service Centre, payroll etc.

Waiting for an early reply. with good example if possible

BALU V

BALU V (Expert)
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18 December 2008 1. In my opinion ST has to be paid on the services rendered in India becoz money is received in INR and both recipient and provider is in India Does not satisfy the Export of services Rules
2. Yes credit can be availed
3. The questiion is not clear. YOu meant to ask, you are also importing certain services and wants to adjust the input credit against such payment. The answer is NO becoz ST is being paid as a recipient of services hence paid by way of cash only like your GTA payment

Guest

Guest (Querist)

19 December 2008 Quick Responce with relevant secgtions or rules is needed

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Guest

Guest (Querist)

19 December 2008 ASAP

BALU V

BALU V (Expert)
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19 December 2008 You have got your first reply within two and hours of your posting and still you need quick response? This toooooooooooooo much my dear Rao.

Guest

Guest (Querist)

23 December 2008 Mr.Balu.

I requested to quote the relevant sections from where actually I can take the provisions to support the views.

If you can provide me with the same I will be very happy.