SERVICE TAX ON CALL CENTER

[AMIT JAIN, Advocate]

Dear sir, please guide me regarding service tax on call center. my client is running a call center and receive payment from out side india. in this case what is the procedure to charge service tax .

AMIT JAIN, Adv.

[MANDAVILLI RAMAKRISHNA]

as the call centre is giving service regarding the data, customers and systems situated at

outside India and the income also thru forex from abroad, no doubt it is export of service.

hence no tax is leviable.

the acid test is:

where the service recipient is based

how the service is provided

how the fee received

where the server of the data is located

where the call centre is situated in India either in SEZ or outside

 

if the central data server is located at abroad and the client is situated at abroad and the payment received form abroad, no doubt this is export of service.

even though the central data server is in India, the client is situated at abroad, the service can be said to have been exported.

please note this criteria is not applicable to 100 percent EOU situated in India.

please note if the call centre is providing service to abroad customers and having contract with

the customers's office situated in India and receiving payment in India then the issue is debatable.

Hope I am clear.

 

AI Summary

Clarification on Service Tax: Call Centers Serving Foreign Clients Qualify as Export of Service, Exempt from Tax. An advocate sought guidance on service tax implications for a call center client receiving payments from outside India. The response clarified that if the call center provides services to clients abroad, receives payment in foreign currency, and the central data server is located outside India, it qualifies as an export of service, exempt from service tax. However, if the call center contracts with an office in India and receives payment domestically, the tax situation becomes debatable. The criteria do not apply to 100% Export Oriented Units (EOUs) in India.