service tax on software online service to overseas countries

[jagadesh kumar bhojanapalli Kumar]

Dear Sir,

We would like to know that service tax is applicable on software service providing to overseas clients through online where we are getting foreign currency on hourly basis and also we are providing service in india GPS tracking . In both cases together it is crossing ₹ 10 Lakhs in last month. We have not obtained any service tax registration.

Pl clarify the same

regards, jagadesh

[KASTURI SETHI]

First category is 'Export of Service'. Hence exempted. The value of export of services is not to be accounted for while computing aggregate value of ₹ 10 lakhs, (Threshold exemption limit under Notification No.33/12-ST dated 20.6.2012)

Second category is taxable. As per Notification No.27/2005-ST dated 7.6.205 as amended vide Notification No.10/2008-ST dated 1.3.2008, any provider of taxable service whose aggregate value of taxable services in a financial year exceeds nine lakhs rupees shall make an application to the jurisdictional Superintendent of Central Excise, in such form as may be specified, by notification, by the Board, for registration within a period of thirty days of exceeding the aggregate value taxable service of nine lakh rupees. Value of export of service is also not to be accounted for while arriving at ₹ 9 lakhs for the purpose of registration.

[Ganeshan Kalyani]

I am of the same view as submitted by Kasturi sir. Further it is suggested to get register as soon as possible so that you can save the interest portion which will increase with the day passes on. Thanks

[jagadesh kumar bhojanapalli Kumar]

Thanks to KASTURI Sir & well noted once second category cross 9 Lakhs we will go for registration.

AI Summary

Export of service exemption excludes foreign receipts from service tax thresholds; domestic taxable services trigger registration once threshold exceeded.
Exported software services to overseas clients are classed as export of services and are exempt, and their value is excluded when computing the aggregate value for threshold-based exemptions. Domestic software and GPS tracking services are taxable, and providers must register once the aggregate value of taxable services in a financial year exceeds the statutory registration threshold; export receipts are not counted for that registration threshold.