Service tax on foreign company

This query is : Resolved

Bharat (Querist)
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26 May 2014 dear sir,
my client of india made a company in uk & he is going to provide service outstide india only & bring payment in india,whethe he is liable for sevice tax or not?

Kalam

Kalam (Expert)
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26 May 2014 Taxable territory has been defined in sub-section 52 of section 65B. It means the territory to which the provisions of Chapter V of the Finance Act, 1994 apply i.e. whole of India excluding the state of Jammu and Kashmir. “Non-taxable territory” is the territory other than the taxable territory.

The taxability of services or the charge of service tax has been specified in section 66B of the Act. To be a taxable a service should be –
• provided or agreed to be provided by a person to another
• in the taxable territory
• and should not be specified in the negative list.

Now the basic criteria for taxability - services should be provided in taxable territory - is not fulfilled and hence there is no Service Tax liability.