Export of services - exempted?

In your case place of provision will be non-taxable teritory. You are exempt from service tax.

Thanks a lot for your reply Arun.

Could you also please clarify if:

1. If we don't need to pay service tax at all or pay tax and claim returns (refund of paid tax)

2. If we dont need to pay service tax, should we still file service tax returns this October

3. Also during service tax registration, would it be required to mention that we would deal only with export of services and get it recorded in their records.

Or just get registration done normally and avoid paying service tax?

You do not need to pay any output service tax if the service is exported as per rule 6A of Service Tax Rules 1994 read with Place of provision of service rules 2012.

You have to pay input service tax to your service providers on input services used by you to provide output service.

It is better to obtain registration though you do not have any output liability. If you are registered, then filing of half yearly returns are also needed.

Make sure the foreign client pays you proceeds within 1 year of date of export througn normal banking channels in FC.

Regards,

1. You can get the refund of input and input services in related to export of service.

2. No need to file service tax return.

3. No need to Service tax registration.

Thanks a lot for the replies.

Only two things which get me into doubt are:

1. Client has a subsidiary in India (Bangalore) - Is it still treated as Export of Services?

2. Client would transfer funds in Pounds. We would receive them in Hyderabad bank account in INR as per exchange rate.

(As we have not set up a Pound account)

Even in this case, are we exempt from paying service tax for the amount we receive from client?

Could you please kindly confirm.

two conditions are mandatory 

1) services so provided are consumed outside the territory of india 

2) payment is received in convertible foreign exchange ( even if you dont have forex account, bank will issue BRC for conversion)

if both are confirmed then service tax not applicable, otherwise ST can not be avoided.