Export of software services

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2012 We have a 100% EOU, STPI registered company which is into providing software offshore services through internet & other telecommunication channels, to its clients worldwide.

Is these export of software offshore services taxable under Service Tax?

Kindly let me know ASAP.

U S Sharma

U S Sharma (Expert)
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22 August 2012 two conditions are mandatory
1) service so provided is consumed outisde india
2) payment is received in convertible foreign exchange thorough proper banking chanels.

if both confirm, then no service tax.

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Querist : Anonymous

Querist : Anonymous (Querist)

23 August 2012 Dear Sharmaji,

Thanks for your reply. However, I have a supplementary question here.

The first condition is met. In the case of second condition, usually all payments are received through banking channels, but severally delayed.

What if the payment is NOT received within the stipulated time or delayed even after obtaining extension of time from the AD / RBI, I mean beyond the extended time after the approved time limit; is this transaction liable for ST ?

Kindly let me know ASAP.

Regards

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U S Sharma

U S Sharma (Expert)
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23 August 2012 if you have evidence that such payment is due and as per RBI guidelines, then department will not insist, but as there is no bondfide record of software export except the payment evidence, its tough to claim exemption in absence of payment confirmation .