Service Tax on indirect export services

This query is : Resolved

Madhu sarda (Querist)
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29 November 2008 Hello All

A client in Indonesia is appointing a partnership firm in India as its consultant for rendering services. The fees shall be paid in USD.The fees will be paid by client to India office.

One of its retainer will be staying in Indonesia full time and providing those services.The retainer shall receive professional fees in INR in India for his services rendered in Indonesia.

Q1 - Whether S.Tax is applicable to Indian Firm
Q2 - The retainer willbe paid in INR in India. Whether S.Tax will be applicable to the professional fees of retainer.
Q3 - If answer to Q2 is YES, then will S Tax be not applicable if retainer receives fees in USD from the Indian firm.
Q4 - Else how do I plan for, so that service tax is not applicable.

Thanks for your earliest reply.

Jitender

Jitender (Expert)
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30 November 2008 1 service tax is not applicable as this is export of service.
2 yes
3 then service tax will not be applicable.
4 u have to receive payment in foreign exchange otherwise service tax will be applicable.