Services tax on call centre services

This query is : Resolved 

27 August 2013 Will provisions of service tax apply on an Indian co. providing call centre services to a USA based co. for its customers in USA?

Please reply.

29 August 2013 It is export of service and accordingly service tax is NOT applicable.

29 August 2013 But, since the Indian co. is providing outsourcing service to a USA based co., doesn't it fall in the ambit of service tax and isn't it an export of service?


31 August 2013 Since the service is provided in India, Service tax provision will apply

01 September 2013 Krishnan Sir,

I have been reading the PPS,2012 rules lately. As per PPS rules, referring Rule 3, I think this rule applies here and the service will be termed as exported service and will not be liable to service tax.

What is your opinion?

Please tell me on basis of which provisions it comes under service tax ambit according to you.

01 September 2013 Please refer

As per Rule 6A of Service Tax Rules, as inserted w.e.f. 1-7-2012, a service shall be treated as export of service when all following conditions are satisfied – (a) the provider of service is located in the taxable territory (b) the recipient of service is located outside India(c) the service is not in negative list of services (d) the place of provision of the service is outside India (e) the payment for such service has been received by the provider of service in convertible foreign exchange, and (f) Service provider and receiver are not merely branches of same person.

01 September 2013 Sir I am doubtful about the pt. no. (d).

Since the calls received are from USA the service received is also in USA only I think.

And a service can only be provided(delivered) at the place where it can be received(place of recipient)

Please correct me wherever I am wrong.

02 September 2013 Sir please refer the
Notification No. 28/2012 - Service Tax that states



02 September 2013 3. Place of provision generally.- The place of provision of a service shall be the location of the recipient of service:



Provided that in case the location of the service receiver is not available in the ordinary course of business, the place of provision shall be the location of the provider of service.


02 September 2013 As per the act place of service is the place of service recipient. so it your case POS rules also satisfied. hence eligible for exemption.

03 September 2013 Thank you so much sir.

06 October 2013 Good morning Sir


One doubt persists in my mind regarding pt d of 6A Rules regarding convertible foreign exchange.

In my case, the assessee was facing difficulty in routing the money receivable to India from USA to stringent norms of RBI. So, they decided to take services of an intermediary in USA that charges some brokerage and converts the dollars into Rs. and remits the balance proceeds to India in assessee's bank A/c.

Does the condition satiSfy or not?

Please reply sir.



06 October 2013 My view,very basic conditions for exemption is to received the money against service is foreign exchange, since you are receiving the same in INR in to India, your exemption eligibility is not available

06 October 2013 Thank You Sir.

13 March 2014 The condition of receving the consideration in convertible foreign exchange has been quashed in the case of:

Nipuna Services Ltd V CCE (A II) Hyderabad (2009) CESTAT Bangalore.

In an exact similar case to the one mentioned by you the court upheld that the condition of receving the consideration in foreign exchange cannot overrule the concept of exports and hence exemptions cannot be denied even if the cosideration is received in INR by an agent after deducting his commissoin.




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