There is one wholly owned subsidiary company in India for e.g. B. B does trading of goods to 1 site other than A site's. B procure goods from A. A is the Foreign(Switzerland) holding company of B i.e. it holds more than 51 % of the shares. A is having 2 sites in India where A supply goods directly to customer from foreign country. But B provides administrative, representation and marketing service to A as he pays EMD for the tender of A on behalf of A. Also B incurred travelling, boarding expense and other incidental expense on behalf of A and recover this expense through Debit Note quarterly from A. Also B’s General Manager visits sites of A and also attend meeting on A’s behalf. B charges ₹ 120000 p.a. for the representation fee from A for this arrangement.Also B recover reimbersement expense from A suppose Rs 1500000 p.a on actual basis. Now my question is that is this service taxable under service tax ? If yes then on what amount Rs 1,20,000/- or 16,20,000/-
31 December 2014
No, the above case does not fall under the ambit of service Tax Laws. As per rule 6A of Export of Service Rules, 2005 if following conditions are satisfied, then it will be considered as export of services. and here a Thumb rule "Export the goods/services no the taxes"
Conditions are: 1 Service Receipt is located outside India 2. Place of provision of Services is outside India. 3.Consideration has been received for providing services in foreign currency.
But B can take the refund the service tax which he paid on input/ input services under the CCR rules 2004
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