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Professional services to nri

CA Vishal Mehta (CA) (123 Points)

15 September 2016

If i Provide professional service to NRI company what is my liability being a resident.

1) Is reverse charge applicable me being an individual

2) Will i need to charge service tax as well

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8 Replies

sonam lohiya (lohiya&co.) (32 Points)
Replied 15 September 2016

To my opinion,as the service is not consumed in India

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sonam lohiya (lohiya&co.) (32 Points)
Replied 15 September 2016

To my opinion,as the service is not consumed in India..it is not taxable.

CA Vishal Mehta (CA) (123 Points)
Replied 15 September 2016

No but the services are rendered in India.However the person paying is outside India.Say for eg I am providing some services to NRI but services are in India but instead of salaey he is paying me professional service charges

Sunil Kumar (Indirect Taxation ) (1246 Points)
Replied 15 September 2016

Can you please explain the Nature of Service. The nature of service will detaermine the leviablity of Service tax.

CA Vishal Mehta (CA) (123 Points)
Replied 16 September 2016

Well nature is basically professional consultancy but directly to NRI and not to anyone here in India.So NRI is givng me an option to take the income as salary or professional whichever ways i prefer.

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Sunil Kumar (Indirect Taxation ) (1246 Points)
Replied 17 September 2016

If you treat this as Professional Service:

Then he place of provision of service would be Place of Service reciver which is ooutside India in or case (Rule-3 of Place of provision of Service Rules2012)

If you treat this as Salary:

Then no taxability arise because it is an employer and employee relationship and thus out of the ambit of Service Tax.

Therefore, no service tax levied in any case. I would recommend consider the Income tax point.

Regards

CA Vishal Mehta (CA) (123 Points)
Replied 17 September 2016

Thanks a lot.Now as a professional service provider i am allowed to deduct expenses right or else go for deemed profit section.So now i can ascertain which is more beneficial from Income tax point of view taking salary with few allowances like HRA etc or to go for professional servie.right?