Foreign Payments for Advertisement Services

This query is : Resolved

Naveen Sharma (Querist)
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30 August 2016 Dear Team, please let me know our company has service provider company there is any service tax liable on foreign payment received against advertisement Services given to client. suppose client had done a payment from foreign but we found that he has run indian associate firm/partnership firm in india. but the data of this firm is not available on the government sites and we can't rectify that the same firm run that person. please suggest there is any tax liability on our company.

Shridhar Hegde

Shridhar Hegde (Expert)
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31 August 2016 According to the rule 6A of Service Tax Rules (Export of Services), 1 994, any service provided or agreed to be provided is considered as export of service subject to the following conditions:

a. The service provider should be located in Taxable territory.
b. Location of the recipient should be outside India.
c. The provided or agreed to be provided services should not be listed in Negative list of services.
d. Place of provision of services should be outside India.
e. service provider for such services should be in foreign currency that can be convertible for another currency.
f. If the service receiver is a branch or agency or representational office of the service provider, such service is not considered as export of service.

As per your query your client did not satisfies the (f) condition, therefore liable to pay ST.