Service Tax on Service provided out of India, but recd from person located outside India

[Milan Gandhi]

I have following 2 Querries related to Service Tax. Request to please guide in the matter :

1. One of my client who is registered under the category of Business Exh Services. He bills to the Indian client for the exhibition to be held out of India. He charges S T on the invoice and pays to the Dept. Now on the other hand, my client engages the party not having any business establishment in India ( Located out of Indian Territory ) for stall fabrication and pays to him.

Querry : Whether Service Tax is to be paid on RCM for payment to foreign party ?

2. The Service Tax Audit is already completed till 31.03.2015 and at present, S T Audit is under process for 2015-16.

Querry : Whether, Recovery for previous years based on above points can be done or not ?

Reply with relevant notifications solicited ASAP.

AI Summary

Service Tax Not Applicable for Overseas Exhibitions; No Extended Recovery Due to Previous Audits per Case Law. A client, registered under Business Exhibition Services, bills Indian clients for exhibitions held outside India and charges service tax. The client also pays a foreign party for stall fabrication. The queries raised include whether service tax should be paid on a reverse charge mechanism for payments to foreign entities and if recoveries can be made for previous years post-audit. Responses clarify that since the services are consumed outside India, they are non-taxable. Additionally, previous audits prevent invoking extended periods for recovery, supported by case law from Karnataka and Mumbai High Courts and CESTAT rulings.