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service tax on sub contract

gopabandhu (service) (19 Points)

22 May 2007

We are providing services in outside India which is exempted from service tax but we are hiring consultants from India & depute them in said projects outside India, whether we will pay service tax to such consultants who are working on behalf of us in such projects out side India ? They are giving service to us & not to the client directly. Pls suggest.

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Rajen (Professional) (122 Points)
Replied 04 June 2007

If you are raising INV to Overseas Customer directly and collect the amount from overseas than in such case service Tax is not applicable. Secondly, If you are raising INV on an Agent in India than in such case Service tax is applicabe(whether your received amount from Overseas/domestic doesn't matter). Raise INV on and Indian Agent means we render service to an Indian Agent on behalf of Overseas Client.