A company enters into a agreement for sales promotion in India for the products of its foreign client in addition to the commission of sales of products by the said client in India. Will the Cost reimbursed by the client for sales promotion in India attract Service Tax for Sales Promotion and Market development done India for that foreign client?
The commission will be paid on Sales of product in India by the client in convertible foreign currency, can that be treated as export of service under new rules?
Debate Over Service Tax on Reimbursed Promotion Costs in India: Export Status Under Rule 6A Questioned A company engaged in sales promotion in India for a foreign client seeks clarification on whether the cost reimbursed for such promotion is subject to service tax. One participant argues that since the service is provided in India, it does not qualify as an export and is taxable. Another suggests the service could be seen as an export under Rule 6A of Service Tax Rules, 1994, considering the foreign recipient's location. The discussion highlights differing interpretations of service tax applicability, referencing various rules and seeking further expert opinions for clarity. (AI Summary)
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