Sir,
We have an export order for components. For the production of the components need to purchase Tools and development of tools . Payment of the tooling and Tooling development will be received in foreign currency from abroad.
The said components will be used in production of the components in India and the said components will export.
Now our query is that:-
Do we need to service tax on Tooling development cost, which develop in India by us, received in foreign currency OR
Exempt from the payment of service tax under Export of Service Rules,2005
.
Service tax not required for tooling development in India for export if service enjoyment is outside India under Export of Service Rules, 2005. A query was raised regarding the service tax liability on the development of toolings in India for components intended for export, with payments received in foreign currency. Three responses were provided. One suggested that if the process amounts to manufacture, excise duty is payable; otherwise, service tax applies. Another advised mentioning the excise duty on the amortized value of tooling for exports. The third response indicated that since the service enjoyment occurs outside India, service tax is not required, as per Export of Service Rules, 2005, and relevant circulars. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
