Taxability of it services rendered in france

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Sweta Singh (Querist)
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11 September 2015 I am now working in France on a contract. As it is not easy to come to france to work, I have a tie up with a very small Indian company.� Infact, the company owner also works with me in France; because he already had an entity, a couple of us decided to come to France through his company and he takes monthly commission from us and from the client(he denies this part but we are sure he is charging the client again).� This Indian company has a direct contract with the client company in France. He charges the client in France, client sends the invoiced� amount to this company account in India. Out of this total amount, he pays us some amount in France as salary and pays some amount in India as professional fees.� As his company is getting the fees directly from France, he or his company are not paying any service tax.� However, that benefit is actually ours as we hired his company for the operations and he is acting like an agent in-between us and the client in France.� In this scenario, do we need to pay service tax in India on the professional fees that we get? All our work/services is in France.� Kindly get me any possible information in this regard as early as possible..

Rajesh Sharma

Rajesh Sharma (Expert)
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11 September 2015 Hi Shweta,

You will not be required to pay any service tax on the salary portion.

With regard to the professional fees, it will be important to have an agreement between you and the company mentioning that the services are actually provided outside india and not taxable as per Place of Provision of Services Rules. The agreement will be key in this regard.

Rajesh Sharma
nspandcompany@gmail.com
9920534595