Non levy of service tax on export of services – Regarding

Export of services exemption continues; secondary services merged with exported services are not separately taxable under service tax rules.

Service tax is a destination-based consumption tax and export of services remains tax-free despite withdrawal of the earlier exemption; tax is leviable only on services consumed or rendered in India. No inter-sectoral credit is available for services used in manufacture of exported goods. Secondary services merged with exported services are not taxable, but if consumed for provision of services in India the secondary service provider is liable. Providers must maintain records to identify secondary services. Change in the service tax rate depends on the billing date relative to passage of the Finance Bill.