Service provided by Forein Country in India

[Ramesh M]

Dear Experts,

We have manufacturing unit in Hyderabad, India also we are registered service recipient. We will give outsourcing to German designer to design some of our manufacturing products. He does not have any Branch or registration India. In this case Service Tax is applicable or not if applicable are we eligible cenvat credit as service recipient.

Ramesh M

[YAGAY andSUN]

Dear Ramesh,

Please check Rule 3 of the Place of Provisions of Services Rules, 2012 as amended in this regard.

Regards

Team YAGAY and SUN

(Management and Indirect Tax Consultants)

[Madhukar N Hiregange]

You are liable as receiver and eligible for credit on payment of ST based on challan.

[YAGAY andSUN]

Respected "Madukar Sir"

Thanks for completing this reply.

Regards

TeamYAGAY and SUN

AI Summary

Place of Provision rules determine taxability of foreign design services; recipient liable and may claim cenvat credit on payment. Taxability of foreign-supplied design services to an Indian manufacturer is determined by the Place of Provision of Services Rules; if provision is in India the recipient is treated as the taxable person and must pay service tax. Where the recipient pays service tax and records payment by challan, the recipient is eligible to claim cenvat credit for the service, subject to standard input service credit conditions.