Is service tax applicable on below service
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
30 July 2013
Indian Engginear applied service to foreign country, weather this service is falls under service tax and react service charge for this?
please ,help!!!..
please ,help!!!..
05 August 2013
Indian engineer received the amount in USD or euro for the services rendered? Please reply.
Querist : Anonymous
Querist :
Anonymous
(Querist)
13 August 2013
payment received in USD.
01 August 2024
Services provided by an Indian engineer to a foreign client are subject to specific rules under the Service Tax regime. The key consideration here is whether the service qualifies as "export of services," which can potentially make it exempt from Service Tax.
### Export of Services
The Place of Provision of Services Rules, 2012, govern the determination of the location where services are considered to be provided. For a service to qualify as an export of service, it must meet the following criteria outlined in Rule 6A of the Service Tax Rules, 1994:
1. **The Provider**: The provider of the service is located in the taxable territory (India).
2. **The Recipient**: The recipient of the service is located outside India.
3. **Place of Provision**: The place of provision of the service is outside India.
4. **Payment**: The payment for such service has been received by the provider of service in convertible foreign exchange.
5. **Use and Enjoyment**: The provider and the recipient of the service are not merely establishments of a distinct person (i.e., they should be separate legal entities).
### Place of Provision of Services Rules, 2012
The relevant rule here is Rule 3, which states that the place of provision of a service is the location of the recipient of the service. Since the recipient of the engineering service is located outside India, the place of provision would be outside India.
### Implications for Service Tax
1. **No Service Tax**: If all the above conditions are satisfied, the service provided by the Indian engineer to the foreign client would qualify as an export of service and would not be subject to Service Tax.
2. **Documentation**: Proper documentation must be maintained to substantiate the claim of export of services. This includes:
- Invoices
- Proof of receipt of payment in convertible foreign exchange
- Any agreements or contracts with the foreign client
3. **Filing Requirements**: While the service may not be taxable, the service provider should still comply with filing requirements, including filing of service tax returns and disclosure of export of services.
### Conclusion
Based on the provided information, if an Indian engineer provides services to a foreign client and receives payment in USD, and the service meets the criteria for export of services, it would not be subject to Service Tax.
However, it is advisable to consult with a tax professional to ensure compliance with all regulations and to confirm that all conditions for export of services are met. The professional can also provide guidance on maintaining the necessary documentation and fulfilling any filing requirements.
### Export of Services
The Place of Provision of Services Rules, 2012, govern the determination of the location where services are considered to be provided. For a service to qualify as an export of service, it must meet the following criteria outlined in Rule 6A of the Service Tax Rules, 1994:
1. **The Provider**: The provider of the service is located in the taxable territory (India).
2. **The Recipient**: The recipient of the service is located outside India.
3. **Place of Provision**: The place of provision of the service is outside India.
4. **Payment**: The payment for such service has been received by the provider of service in convertible foreign exchange.
5. **Use and Enjoyment**: The provider and the recipient of the service are not merely establishments of a distinct person (i.e., they should be separate legal entities).
### Place of Provision of Services Rules, 2012
The relevant rule here is Rule 3, which states that the place of provision of a service is the location of the recipient of the service. Since the recipient of the engineering service is located outside India, the place of provision would be outside India.
### Implications for Service Tax
1. **No Service Tax**: If all the above conditions are satisfied, the service provided by the Indian engineer to the foreign client would qualify as an export of service and would not be subject to Service Tax.
2. **Documentation**: Proper documentation must be maintained to substantiate the claim of export of services. This includes:
- Invoices
- Proof of receipt of payment in convertible foreign exchange
- Any agreements or contracts with the foreign client
3. **Filing Requirements**: While the service may not be taxable, the service provider should still comply with filing requirements, including filing of service tax returns and disclosure of export of services.
### Conclusion
Based on the provided information, if an Indian engineer provides services to a foreign client and receives payment in USD, and the service meets the criteria for export of services, it would not be subject to Service Tax.
However, it is advisable to consult with a tax professional to ensure compliance with all regulations and to confirm that all conditions for export of services are met. The professional can also provide guidance on maintaining the necessary documentation and fulfilling any filing requirements.
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