Export of Service

[Shyam Naik]

A Ltd is in the business of software development. B Ltd is 100% subsidiary of A Ltd and is located outside India.

B Ltd received orders for software development from customers outside India and in turn places orders on A Ltd.

A Ltd supplies the software to B Ltd and receives payment for the same from B Ltd.

Whether, the development and supply of software by A Ltd to B Ltd if "Export of Service"? Is the relationship of Holding and Subsidiary is covered by explanation 3 to section 65B(44).

Regards,

Shyam

AI Summary

Export of Service: supplying software to a foreign subsidiary is export when place-of-provision and export-rule conditions are satisfied.
Whether cross-border software supplied by a domestic company to its wholly owned foreign subsidiary is an export of service depends on the place-of-provision rule locating the recipient in a non-taxable territory and on meeting the export-rule conditions distinguishing a foreign establishment from a domestic branch.