Provision of IT (software) service from India_Service Tax payable?

[Yatin Bhopi]

Dear experts,

We propose to provide IT ( software )related trouble shooting services from India to our other affiliate company located across the globe, for which we will be recovering some fees by raising invoices for the services provided to them from India. The affiliate will place the service request from outside India whenever required. We will receive the fees in convertible foreign exchange.

Are we require to pay service tax on the same in India? if yes in which service category?

[Akash Deep]

Dear Yatin,

i am surprised to see that no body has answered this query till now and i am not sure as to much relevant this query remains. any way, i will answer this query.

i assume that software is hosted on the server of the affiliate company and such server is located out side India. As you are providing service through internet which is nothing but by way of electronic means, POP of such services shall be determined as per first proviso to Rule 4. POP shall be the location of software i.e. outside india. No service tax shall be leviable on such services, as you are receiving consideration in convertible foreign exchange. you services will qulify as export of services

AI Summary

IT Troubleshooting Services to Foreign Affiliate Considered Export; No Service Tax Applies Under Place of Provision Rules. An individual inquired about the applicability of service tax on IT troubleshooting services provided from India to an affiliate company abroad, with fees received in convertible foreign exchange. A respondent clarified that since the software is hosted on a server outside India and services are provided electronically, the Place of Provision (POP) is considered outside India. Therefore, no service tax is applicable as the services qualify as exports.