Import Of Services

This query is : Resolved

Shashank (Querist)
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11 October 2009 When we want to classify a particular transsaction as import of service, should I consider the place where the service was rendered or the place where the benefit of such service is seen?
For example, there is management consultant in US. A company from India sends its employee to the consultant. The consultant gives his suggestions in US while the company implements the suggestions and the benefits are seen in India. So should I classify this as import of services?

sivadas chettoor

sivadas chettoor (Expert)
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12 October 2009 When a person renders services from outside the country and the same is received by a person in India import of services takes place. Charging the recipient of a service from a non-resident is a well accepted international taxation practice.Thus the matter attracts service tax . Prima facie the exemption also may not apply because of the condition that the service should have been consumed outside the country and it should not have been in the course of business or commerce.
CA Sivadas Chettoor
siva208@yahoo.com

Dayal

Dayal (Expert)
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12 October 2009 When we want to classify a particular transsaction as import of service, should I consider the place where the service was rendered or the place where the benefit of such service is seen?
For example, there is management consultant in US. A company from India sends its employee to the consultant. The consultant gives his suggestions in US while the company implements the suggestions and the benefits are seen in India. So should I classify this as import of services?

Take three things into consideration for Management Consultant

The three clauses under which the import of services have been categories
Immovable property situated in India
Service at least partly performed in India
Services received by recipient located in India for use in business or commerce
2. The mode of making the payment - in FE
3. Location of the recepient

In the instance case Management consultant fall under Services received by recipient located in India for use in business or commerce, so irrespective of performance will be liable for service tax under Import of services and service tax stands to be payable by you.

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Manoj

Manoj (Expert)
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12 October 2009 Good reply by Dayal