Export of services

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Anand (Querist)
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23 January 2013 Hi all
I have a client Pvt Ltd company providing Content Development & Management Services ( Mobile Application and Other allied software's) to a US Company.

These application of contents are developed in India and sent to the US company by Internet ( email or FTP)

Will Service Tax be applicable on this or will it be treated as Export of Services Outside Indian and be exempt from the liability

Jagdishkumar M Gor

Jagdishkumar M Gor (Expert)
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24 January 2013 you need to provided the details of payment, if your client provide the service to US compnay a non-taxable are and receive the payment from them in foreign currency, it called export of service, so no service tax.

Anand

Anand (Querist)
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25 January 2013 Thank You Mr Jagdishkumar
following are the details

1. services Provided to US ( 100% Holding Company) which does not have any PE in India

2. Receipts are in Forex only...
will Indian Company being 100% Subsidiary of US company to which services are provided make it taxable under service tax ?
can you provide any citations if you have?

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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24 July 2024 In the scenario you've described, where an Indian Pvt Ltd company provides Content Development & Management Services (Mobile Application and Other allied software) to its US parent company (100% holding company), let's analyze the applicability of service tax (GST) and whether it qualifies as export of services:

### Applicability of Service Tax (GST)

1. **Place of Provision of Services**: According to GST regulations (and previously under Service Tax), services provided from India to a location outside India are generally treated as exports of services. For services to qualify as export of services under GST:
- The supplier of service (Indian company) should be in India.
- The recipient of service (US company) should be located outside India.
- The place of supply should be outside India.
- Payment should be received in convertible foreign exchange or in Indian Rupees wherever permitted by RBI.

2. **Nature of Services**: Content Development & Management Services provided via digital means (email or FTP) would typically qualify as services performed and utilized outside India if the services are delivered and utilized abroad.

3. **Tax Liability**: Since the recipient of your services (US company) does not have a Permanent Establishment (PE) in India, and assuming all conditions for export of services are met (including receipt in Forex), the services provided by your Indian company would generally be exempt from GST (Service Tax).

4. **Citations and References**:
- There is no specific case law or citation provided in your query, but the principles governing export of services under GST are aligned with the earlier Service Tax regime and international taxation principles.
- Circulars and notifications from the Central Board of Indirect Taxes and Customs (CBIC) provide guidelines on the tax treatment of export of services. These include Circular No. 334/1/2016-TRU and other relevant notifications.

### Conclusion

Based on the information provided:
- **Services to a Foreign Recipient**: Since the US company (your client) is the recipient of services and does not have a PE in India, and considering the services are delivered and utilized outside India, they should qualify as export of services under GST.
- **Exemption from GST**: Therefore, your Indian company should not be liable to pay GST (Service Tax) on these export services.
- **Documentation**: Ensure proper documentation is maintained, including invoices indicating export of services, proof of receipt in Forex, and compliance with GST requirements for export services.

It's advisable to consult with a tax advisor or GST consultant to ensure compliance with GST regulations specific to your business and services provided. They can provide tailored advice based on the latest regulations and interpretations.