21 December 2012
I have one query. my friend offer software developments and such computer related services to foreign customers - where again the money is received into her Indian bank account ((in foreign currency - converted to INR by the bank) through a payment gateway.
Whether it is necessary to register under service tax if turnover exceeds r.9 lacs?? is it exempt from service tax levy ?? if her earnings corss the 10-lac boundary? Thanks for your guidance in advance.
The service of software development and other computer related activity are covered in the residual rule 3 of Place of provision of service rule, 2012 and place of provision in this case is location of service recipient hence not liable to tax, if the service is not liable to tax in India then no question of service tax arises and no registration required.
02 March 2013
refer the following: Rule 9- Specified services- Place of provision is location of the service provider What are the specified services where the place of provision is the location of the service provider? Following are the specified services where the place of provision is the location of the service provider:-
iii) Online information and database access or retrieval services; What are “Online information and database access or retrieval services”? “Online information and database access or retrieval services” are services in relation to on-line information and database access or retrieval or both, in electronic form through computer network, in any manner. Thus, these services are essentially delivered over the internet or an electronic network which relies on the internet or similar network for their provision. The other important feature of these services is that they are completely automated, and require minimal human intervention. Examples of such services are:- i) online information generated automatically by software from specific data input by the customer, such as web-based services providing trade statistics, legal and financial data, matrimonial services, social networking sites; ii) digitized content of books and other electronic publications, subscription of online newspapers and journals, online news, flight information and weather reports; iii) Web-based services providing access or download of digital content. The following services will not be treated as “online information and database access or retrieval services”:- i) Sale or purchase of goods, articles etc over the internet; ii) Telecommunication services provided over the internet, including fax, telephony, audio conferencing, and videoconferencing; iii) A service which is rendered over the internet, such as an architectural drawing, or management consultancy through e-mail;
if your friend is providing the above service, the ST is payable.
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