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Service tax liability

Sumeet (CA Final) (110 Points)

29 March 2012

If the service is rendered by an Indian company in India to a foreign company, whether Service Tax will be charged on the Invoice?

Will your answer change if the Bill is raised in US Dollars?

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13 Replies

praveen (Chartered Accountant) (6971 Points)
Replied 29 March 2012

If the service is export of services then you have the option of first charging service tax and claiming it back by way of a refund.

If the company is also incorporated abroad then there is no need to pay service tax as you can claim export of service

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Devendra (Chartered Accountant) (4775 Points)
Replied 29 March 2012

1) In the given case, Service is provided by the Indian Co. to Foreign Co. in India, therefore Service Tax will be levied on the bill raised on the Foreign Co. for the Services rendered.

2) My answer wouldn't change even if the bill is raised in US Dollars ($).

Regards,

Devendra

Mihir (Wealth Manager) (5293 Points)
Replied 30 March 2012

Service tax applicable as services are provided in India.

Mihir (Wealth Manager) (5293 Points)
Replied 30 March 2012

Service tax applicable as services are provided in India.

CA Nikhil Jhanwar (CA,CS) (4447 Points)
Replied 30 March 2012

Originally posted by : Devendra
	1) In the given case, Service is provided by the Indian Co. to Foreign Co. in India, therefore Service Tax will be levied on the bill raised on the Foreign Co. for the Services rendered. 2) My answer wouldn't change even if the bill is raised in US Dollars ($). Regards, Devendra	Agreed

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CA PRAVEEN SINGH (MANAGER ACCOUNTS) (2277 Points)
Replied 30 March 2012

(i) yes.service tax has to be charged.

(ii)answer will not be change.

1 Like

K. C. SUTHAR (Practising company Secretary) (28 Points)
Replied 30 March 2012

Yes, Since the service is provide in India, therefore the Service tax is to be charge. Yes, Even the bill is issued in USD.

Phalgun (Audit Manager) (327 Points)
Replied 30 March 2012

ya agreed with devendra

R.Chitra Lekha (B.com , CA (Ipcc) ) (115 Points)
Replied 30 March 2012

service tax is charged ... even if the invoice is in us dollars

Ravindra (CS-Final) (22 Points)
Replied 31 March 2012

YES ..service tax is charged

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Samanvay Sharma (Manager) (22 Points)
Replied 23 July 2012

What if the service is rendered to a foreign entity (example- in Hospitals treatment provided to foreigners) and hence classified as deemed export. In any case there is no service tax on medical treatment. However the situation changes if the bill is raised to a 3dr party (intermediary registered in India that manages all the arrangments for these patients). Can the bill be raised in dollars to this 3rd party?

CA Lokesh Kumar Tiwari (Asst. Finance Manager) (195 Points)
Replied 23 July 2012

As we know that service tax is a consumption based destination tax. So if service is consumed outside india, I think service tax should not be levied on such transaction. Answer would be same even if bill raised in US $.

Samanvay Sharma (Manager) (22 Points)
Replied 23 July 2012

Thanks Lokesh! However need the answer to the second part of my query related to 3rd party.

Can the bill be raised in dollars to the 3dr party (intermediary registered and operating in India that manages all the arrangments for these patients)?This intermediary receives payment in dollars.