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Service tax on, "Export of Services"

ashu's (student) (78 Points)

21 December 2009

I want to know if any company give their management consulting with softwares made in india provided outside the India, then they charge service tax from the client.

E.g: ABC Ltd. give their management consulting with softwares to a financial institution in Africa. Will they charge service tax in their invoice.

If "Yes", then why Rule of service tax" Export of Services" wil not apply"?

If "No", then it is manadatory fro the firm to get registered in service tax ?

Wht is the meaning of "If service is exported, there is no service tax liability . According to the Rule 3 of the Service Act . Kindly explain.

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Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 23 December 2009

Management consultacny falls inot the - recepient location category in export of services. Since the recepient is in Africa there is no servic etax for the MC services. As far as software is concerned the same maybe liable only for VAT - Infosys Tech - Chennai High Court decision states that - cusotmised s/w is goods.

The other conditions of export applicable to all service exports is that the servic eus used outsaide India and the receipt of the consideration is in CFE .