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tedious problem

MANISH KAPOOR (PARTNER) (97 Points)

01 June 2009

There is a Private Ltd Co. having a registered office in Jammu & kashmir, the co is having its operations at its corporate office in Delhi Now i have following Questions.

1. Since Service Tax is not applicale in J&K so are the receipts from operations in J&K to be included for calculating the Basic Exemption Limit.

2. The Co is having 80% receipts from foreign clients, what is the applicablity of Service Tax on those receipts, are they included in the calculation of basic exemption limit.(assume all receipts are from the services on which service tax is applicable)

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5 Replies

Satish (CA Final Student) (479 Points)
Replied 01 June 2009

First of all, You need to register all the premises wherefrom the company render the services. Alternatively, if the accounts & billing is maintained at central place, say Corporate office, you can avail the centralised registration for all the premises at one place where the accounts & billing is maintained. You need to mention the fact of central registration on ST 1 application. When Service tax is not applicable in J & K, services rendered in J & K are not liable to service tax. Nor it could be includible in calculation of exemption limit.

Secondly, if the 80% services fall under export of service, the turnover for the purpose of exemption would exclude these 80%. But if these service are out of purview of export of service and are taxable otherwise, definitely includible in the turnover for the purpose of exemption. The preceding years turnover decides the taxability of services in current year.

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MANISH KAPOOR (PARTNER) (97 Points)
Replied 01 June 2009

does the following services are in the purview of export of survices

1. website designing for a foreign client

2.preperation of financial reports

3.technical consultancy

Satish (CA Final Student) (479 Points)
Replied 01 June 2009

Prima facia all the 3 services are covered under export of service Rules except the 3rd which is little doubtful but possibly covered. what is exactly Technical Consultancy? is it relating to consulting engineers services? The ananlysis of service would define its inclusion.

Website designing covered under clause (zzzzd) & Preparation of financial reports covered under (zzzq) of the clause (105) of section 65.

Vishal Gill (C.A.) (49 Points)
Replied 04 June 2009

in my opinion Technical Consultancy should be covered under 65(105)(g). in export of services rules it falls under Rule 3(iii). for detail u may refer Circular No.111/05/2009-ST.

Satish (CA Final Student) (479 Points)
Replied 04 June 2009

The opinion of Vishal Gill will stand correct if the company is providing technical services in the nature of services provided by a 'Consulting Engineer'. Clause (g) of sub section (105) of sec 65 has a very wide scope but restricted to the service performed by a qualified engineer or a diploma holder in engineering stream. If the technical services are in the nature other than the services provided by a consulting engineer the opion of Vishal cannot stand and the service could be defined according to its nature.