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Service Tax Registration for Foreign Company

narayana hegde (Profession) (26 Points)

08 June 2011

Dear All

I am Narayana . There is one UK based company registered in UK. There is one employee (other employees in UK) in this company in INDIA . The employee in india is of Indian origin. ( There is no branch in India ). Company will serve one Indianbranch of Foreign MNC . Billing of this service will be in UK. to HO of the MNC ( service receiver)

Whether this service is taxable in India? If Yes What is the procedure to register this UK Company in India under Service Tax.?.

Please clarify the above

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8 Replies

Prasad (Sr. Manager) (617 Points)
Replied 08 June 2011

Hi Narayan if i understand your question right - the point you are making is that the service is provided in India, but the billing is from UK to a customer in India. if you answer to my understanding is yes. Service tax is applicable as long as services is provided in India Please check Circular 141 issued dated 13th of May 2011.

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CA. Rashi Goyal (Chartered Accountant) (512 Points)
Replied 09 June 2011

As per my understanding Indian branch is required to obain the registeration and would required to pay the service as reciepient of service under reverse charge method.

CA. Rashi Goyal (Chartered Accountant) (512 Points)
Replied 09 June 2011

As per my understanding Indian branch is required to obain the registeration and would required to pay the service as reciepient of service under reverse charge method.

CA. Rashi Goyal (Chartered Accountant) (512 Points)
Replied 09 June 2011

As per my understanding Indian branch is required to obain the registeration and would required to pay the service as reciepient of service under reverse charge method.

narayana hegde (Profession) (26 Points)
Replied 09 June 2011

Dear Mr Prasad

Thanks for the clarificatio.

Please note that eventhough service rendered in Indian Branch of the MNC, billing is from UK(Service Provider) to MNC Head office at UK. Billing is not addressed to Indian Branch of the MNC (service receiver)

Please clarify

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narayana hegde (Profession) (26 Points)
Replied 09 June 2011

Hi Rashi

Thanks for the clarifications.

Please note that there is no indian branch of the Service Provider Company. One indian staff provides the service. He is in the roll of Head Office(UK)

Prasad (Sr. Manager) (617 Points)
Replied 09 June 2011

you mean only the services is in India and the commercial all transcations happen at UK. I am still of the opinion ST is applicable, however since both the parties involved person raising the invoice and the person paying in overseas who should pay tax?? Let me check on this, a difficult proposition.

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 09 June 2011

as the service is used by indian branch of MNC, how they can define it in their accounts if the bills are paid in uk? if this is not reflected in indian accounts then no question of st, as service tax applies only when some commercial transaction takes place.