Service tax on export of service???

This query is : Resolved

CA Amit Joshi (Querist)
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22 January 2013 Dear Expert,
One of my client exporting its services relating to software development. He is 100% exporter for services.
The turnover in current FY is Rs 9 lacks. I want to know that is Service tax applicable on export of services??
Is there any requirement to register with service tax department???

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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22 January 2013 As per Rule 3(1)(iii) of the Export of Services Rules, 2005, providing Consulting Engineers' Services would be considered as export of service if receipient is located outside india and the payment is received in convertible foreign exchange. And, as per Rule 4, any service, which is taxable under clause (105) of section 65 of the Act, may be exported without payment of service tax.

With regard to registration, there is no specific mention about the exclusion of the value of taxable services which are exempted for export of services. But, if we refer the meaning of 'aggregate value of taxable service' under Notification No.26/2005-ST dt.7.6.2005, the real intention may be not to include the value of taxable services which are fully exempted by notification or otherwise for the purpose of arriving at the aggregate value of taxable service under said Notification dealing with mandatory registration u/s.69(2).

However, I suggest you to go for registration and claim exemption by showing the same in the return to be filed.