Dear experts,
We are going to receive “On-Site Methodology and Software Training” in India by Foreign Service provider. They are going to raise bill in Indian Rupees. As a recipient of service we are going to pay service tax under reverse charge.
My query is
- Is there any compulsion to raise bills in freely convertible currency(USD/EURO) if billed from outside India.
- Under “Commercial training or coaching service” classification of service is correct? Since this service is not added in our registration certificate we need to amend our registration certificate.
Please let me know your opinion
Foreign Service Provider Can Bill in Indian Rupees; Classification Key for Tax Purposes, Not Import if Local Branch Involved. A discussion on whether a foreign service provider can raise a bill in Indian Rupees highlighted several points. A service recipient in India queried about the necessity of billing in a freely convertible currency and the correct classification of services under service tax regulations. Experts clarified that there is no compulsion to invoice in foreign currency under current rules, though classification remains crucial for tax purposes. The service in question, provided by a Singapore-based company with an Indian branch, does not constitute an import of services if the branch is involved, affecting the applicability of reverse charge mechanisms. The consensus was that the service provider's decision to bill in Indian currency might be strategic, possibly indicating business intentions in India. (AI Summary)
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