service tax on secondary services

V.ganapathy (consultant) (87 Points)

20 July 2011  

A from India exports service to USA.hence no service tax if his fees are received in foreign currency. If A uses the services of B in India as part of his services to the US firm does B have to pay service tax on his payments from A if it is received in Rupees? The confusion arises as the govt notification says secondary services which are part of the export of services are also exempt from service tax.  or is it better to ask the US firm pay directly to B(which will be difficult)