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export of service..need help

05 April 2011

s'is an indian firm .procuring orders for a foreign company and gives list of orders to that foreign company.Further there is no dealing between 's'and the other indian firm.After recieving list that forein company deals directy with the indian company who ordered for its products. 's' recieves commission for this in US$ remitted through bank .As per export rules it seems covered under export rules --correct or not ! Explain...
further..whether "s" is liable to pay service tax or nt..if yes why n if nt y..?

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8 Replies

Pinky Agarwal (Chartered Accountant) (426 Points)
Replied 05 April 2011

I think it will be covered under Export and the same is exempt from service tax. This view is further established in Blue Starv. CCE(2009) 18 STT 34 (CESTAT SMB), appellant booked orders in india for their foreign principals. Goods were supplied by foreign principal on the basis of these orders and appellant got commission from them. It was held that this is export of service - followed in KSH International v. CCE (2010) 25 STT 307(CESTAT SMB)

So, S is not liable to pay service tax as his service is covered under export and export is not taxable.

Regards,

Pinky Agarwal.

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ashwini (accoutant) (21 Points)
Replied 05 April 2011

Our principal Company. is in US . we are providing Labour Work to Company. situated in India on behalf of our principal co. For this we raised Labour invoice on our principal co.

So kindly let me know whether service tax is applicable or not & if yes is it on receipt basis or due basis.

saurav aggarwal (student) (77 Points)
Replied 06 April 2011

can sumbdy plz give details regardind under which section this case will fall..

n is dere any notification issued.

Pinky Agarwal (Chartered Accountant) (426 Points)
Replied 06 April 2011

Originally posted by : ashwini
	Our principal Company. is in US . we are providing Labour Work to Company. situated in India on behalf of our principal co. For this we raised Labour invoice on our principal co. So kindly let me know whether service tax is applicable or not & if yes is it on receipt basis or due basis.

As per my view service tax will be applicable on it as it does not fall under 'export of service'. and It will be on due or receipts basis whichever is earlier.

Pinky Agarwal (Chartered Accountant) (426 Points)
Replied 06 April 2011

Originally posted by : saurav aggarwal
	can sumbdy plz give details regardind under which section this case will fall.. n is dere any notification issued.

It will fall under [Rule 3(iii)] Service provided from india, but recipient of service outside india of export of service rules.

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saurav aggarwal (student) (77 Points)
Replied 06 April 2011

In terms of rule 3 (2) (a) of the Export of Services Rules 2005, a taxable service shall be treated as export of service if “such service is provided from India and used outside India” ..

@ pinky..y it nt fall in export of service category.?

Pankaj Arora (Learner) (3134 Points)
Replied 06 April 2011

in export service its also mention that payment should recd in foreign exchange currency hence you full fill this condition…

Pinky Agarwal (Chartered Accountant) (426 Points)
Replied 06 April 2011

Originally posted by : saurav aggarwal
	In terms of rule 3 (2) (a) of the Export of Services Rules 2005, a taxable service shall be treated as export of service if “such service is provided from India and used outside India” .. @ pinky..y it nt fall in export of service category.?