Service tax applicable?
This query is : Resolved
24 August 2012
Hello Sir,
I am running a web development firm. My most of the money is coming from foreign sources. I provide them the web developer(complex website), seo and web designing services. Most of the money coming from wire transfer and rest of the money is coming through online freelancing websites. Please guide me about service tax, whether I have to pay service tax for the services I provide or are they exempted, If I have to pay service tax then my services are falling under which category, please provide me the code of serivce under which I have to pay service tax.
I am running a web development firm. My most of the money is coming from foreign sources. I provide them the web developer(complex website), seo and web designing services. Most of the money coming from wire transfer and rest of the money is coming through online freelancing websites. Please guide me about service tax, whether I have to pay service tax for the services I provide or are they exempted, If I have to pay service tax then my services are falling under which category, please provide me the code of serivce under which I have to pay service tax.
24 August 2012
for service tax exemption you need to note two things in primary stage.
1) payment is made in convertible foreign exchange through proper banking channels
2) service is consumed outside the territory of india.
if both criteria is confirmed then no service tax.
1) payment is made in convertible foreign exchange through proper banking channels
2) service is consumed outside the territory of india.
if both criteria is confirmed then no service tax.
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24 August 2012
I need the explanation of first point and if you can explain these two points in details with example, then it will be great for me.
24 August 2012
payment in convertible foreign exchange means that the buyer country use any other currency which is not in indian rupee, and the same is sent to your banker, and banker converts the same in indian rupee for you.
geographical boundaries of india ( except jammu and kashmir) is covered under service tax, and any service provided or used within these is liable for service tax, irrespective of the fact that payment is recd in foreign exchange,
viz ..............an overseas company has office in delhi and their UK office pays you for doing some development work at delhi, this is taxable service, regardless of the fact that payment is recd in foreign exchange.
so its mandatory that services are not consumed within india.
geographical boundaries of india ( except jammu and kashmir) is covered under service tax, and any service provided or used within these is liable for service tax, irrespective of the fact that payment is recd in foreign exchange,
viz ..............an overseas company has office in delhi and their UK office pays you for doing some development work at delhi, this is taxable service, regardless of the fact that payment is recd in foreign exchange.
so its mandatory that services are not consumed within india.
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24 August 2012
I have both points met to my work. Then I do not need the service tax. My clients are in USA and they made me the payment through wire transfer in USD and my bank convert those USD in Rupee and through in my account. All my services are consumed mostly outside India.
24 August 2012
again the word "mostly" is a point of taxation,
you have to establish that there is nothing consumed within india,
and if consumed in india, you have to pay ST on that, however you can avail exemptin upto 10 L as SSP.
you have to establish that there is nothing consumed within india,
and if consumed in india, you have to pay ST on that, however you can avail exemptin upto 10 L as SSP.
24 August 2012
service tax is a part of indirect taxes, where such words, mostly, almost, approx is understood by departmental officers as 100% taxable, so please be specefic in your accounting regarding export and domestic turnover of services.
best of luck
best of luck
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