aishwarya s raghavan (student) (224 Points)
29 March 2013Dear All!
Please let me know if service tax is applicable in this case and reverse charge will apply or not.
The company is doing marketing service in India for a foreign company and receives comission for the same. Is service tax applicable on such comission and whether reverse charge would apply as well.
Thanks in advance!
The company is rendering marketing service in India for the foreign company
Vaibhav Pitliya
(Student CA Final )
(71 Points)
Replied 29 March 2013
Thanks...
Asif Khan
(Taxation executive)
(410 Points)
Replied 30 March 2013
There are some questions-
Is the foreign company owning any office in india?
Is the Indian company recieving commission in Foreign currency?
aishwarya s raghavan
(student)
(224 Points)
Replied 30 March 2013
Yes, sir the company is an Indian co. and the comission is billed in foreign currency and receipt is done in foreign currency.
Asif Khan
(Taxation executive)
(410 Points)
Replied 30 March 2013
Then
In the present case service tax is not applicable by virtue of export of service rules 2005 which states if following conditions are fulfilled a) such services is provided from India & used outside India b) payment for such services is received by the services provider in convertible foreign exchange.
Hope Its clear @ Aishwarya..
aishwarya s raghavan
(student)
(224 Points)
Replied 30 March 2013
But thn Asif, with effect from 1st july, 2012 its taxable na?
Asif Khan
(Taxation executive)
(410 Points)
Replied 30 March 2013
aishwarya s raghavan
(student)
(224 Points)
Replied 30 March 2013
Exactly Asif, here the service is rendered within the taxable territory, ie service rendered inside India, so service tax is applicable right?
I'm not clear as to whether reverse charge is applicable under this. Please clarify.
CAclubindia
