Dear Sir / Madam,
We are a Civil Engineering Services Provider. We are providing Engineering Design & Detailing for Indian companies. We are following all service tax rules for the same.
Recently we have got the chance to provide similar services to a US Based client. The client is in USA, his works is also in USA, we raise invoices to USA and get paid in Dollars. Is service tax applicable on this income? What i am hearing from few people is that once you are in service tax net irrespective of whether the money is coming from India or abroad , service tax has to paid. But when i read across different forums it is clear that work done for companies outside India and remuneration received from outside India is exempt from service tax.
Hence is it possible for a company to have both type of clients? And also is it possible that the company pays service tax for all its earnings from India and for all foreign earnings it does not pay service tax.
If there is any relevant section which confirms this , then please give me that also.
Thanks
Hilmesh Gandhi
1We are a Civil Engineering Services Provider. We are providing Engineering Design & Detailing for Indian companies. We are following all service tax rules for the same.
Recently we have got the chance to provide similar services to a US Based client. The client is in USA, his works is also in USA, we raise invoices to USA and get paid in Dollars. Is service tax applicable on this income? What i am hearing from few people is that once you are in service tax net irrespective of whether the money is coming from India or abroad , service tax has to paid. But when i read across different forums it is clear that work done for companies outside India and remuneration received from outside India is exempt from service tax.
Hence is it possible for a company to have both type of clients? And also is it possible that the company pays service tax for all its earnings from India and for all foreign earnings it does not pay service tax.
If there is any relevant section which confirms this , then please give me that also.
Thanks
Hilmesh Gandhi
Normally, Service tax is not applicable on export of services. However, you would need to confirm that your transaction satisfies the conditions which are necessary to avail the exemption as per the service tax law.
Thanks,
Kind Regards,
Avika Kapoor
General Manager - Business Development
E-174, Kalkaji, New Delhi-110019
, 7503110322
Website: Kapgrow
From India, New Delhi
Thanks,
Kind Regards,
Avika Kapoor
General Manager - Business Development
E-174, Kalkaji, New Delhi-110019
, 7503110322
Website: Kapgrow
From India, New Delhi
Hi,
As far as my knowledge goes, there is no service tax on service done outside India. (Export of services). However payment in foreign currency should have been received by you for the services rendered within the stipulated time as per RBI guidelines. (I understand that it is 12 months). If payment is not received within this stipulated period, you need to pay service tax with interest, from the date of completion of service. (Date of completion is deemed to be point of taxation and hence you need to have documents for this).
Regards,
Raja C S N
Chennai
From India, Madras
As far as my knowledge goes, there is no service tax on service done outside India. (Export of services). However payment in foreign currency should have been received by you for the services rendered within the stipulated time as per RBI guidelines. (I understand that it is 12 months). If payment is not received within this stipulated period, you need to pay service tax with interest, from the date of completion of service. (Date of completion is deemed to be point of taxation and hence you need to have documents for this).
Regards,
Raja C S N
Chennai
From India, Madras
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Service Tax.pdf