If A is exporting engineering services to the USA and uses the services of B a consultant from USA to do part of his work and pays him in foreign currency then reverse charges are triggered and ST is applicable on the fees paid to the consultant. .The question is that ST fully refundable as the fees are used in export of services?? if so,pl cite the provision.Thanks
2 Replies
Madhukar N Hiregange
(Chartered Accountant)
(39034 Points)
Replied 24 January 2013
Yes the engineering service being in the nature of export are eligible for refund. The input service being eleigible, the same is refundable.
Natesh Navada
(Chartered Accountant)
(149 Points)
Replied 24 January 2013
Tax paid on import of service is eligible for set off against your output service. Since the only output service you have is export of services, the same can be applied for refund under Rule 5 of CCR 2004.
Natesh
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