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Consultancy services

Prakash (Student Others) (50 Points)

11 March 2014

Hi,

Need to know whether service tax is applicable for consultancy service like providing market information, agency commissions on products sold in India, etc when the receipt of service is outside the country. Service provider receives 100% payment in forex towards the service rendered. Service receiptant does not have any office in India. If exempted please let me the notification details

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4 Replies

Manoj Mehta (Head Of Department (Accounts & Finance)) (1479 Points)
Replied 11 March 2014

Dear prakash your case comes under export of services and hence exemption is available. You can read export of services for the same on google. I hope this well you regards

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Prakash (Student Others) (50 Points)
Replied 11 March 2014

Thanks Manoj for your quick response. Let me be more specific:

1. My firm (partnership) locates customers, provides market information, etc which results in sales of products in India. Towards this we are paid consultancy fees (commission) in forex

2. If you read the July 2012 notification on Export of services there seems to be some confusion which states that even if the service receipt is overseas and pays in forex, service tax may be applicable

3. If will be helpful if you can provide me the notification to claim exemption

Regards,

Prakash

Manoj Agarwal (Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com) (3456 Points)
Replied 11 March 2014

Dear Sir, Export of Service Rules has been withdrawn w.e.f. 01-07-12. Now, benefit of export of service is received under Rule 6A of Service Tax Rules, 1994. If you are providing 'intermediary' service, then service tax is applicable @ 12.36%. Prima Facie, it seems you are not providing 'intermediary service' and exempted from service tax. Kindly E:Mail for further clarification.