Applicability of Service tax

[Rohit Bathwal]

Hi,

I have two queries as under:

1) We are a company in India and is providing software development and integration service to a client in UK. We will be billing the client on man hour basis for the service provided in USD and/ Or GBP Kindly guide if service tax is applicable for this transaction.

2) The same company is providing sales services to a client in UK, i.e. we are selling the products of the UK based companies online in UK. The product is owned by the client in UK and we just provide the online sales services. We shall be receiving commission on the sales as a percentage of sales. Kindly guide if Service tax is applicable in this transaction.

Kindly provide your valuable comments on above.

[MUKUND THAKKAR]

1) We are a company in India and is providing software development and integration service to a client in UK. We will be billing the client on man hour basis for the service provided in USD and/ Or GBP Kindly guide if service tax is applicable for this transaction.

2) The same company is providing sales services to a client in UK, i.e. we are selling the products of the UK based companies online in UK. The product is owned by the client in UK and we just provide the online sales services. We shall be receiving commission on the sales as a percentage of sales. Kindly guide if Service tax is applicable in this transaction.

In above both situation you are providing the service out side the India , so treated as export service no service tax is applicable,

[Himansu Sekhar]

In my personal view Mukundji is correct. In the secondcase the querist has not mentioned as to whether the commission amount received in convertible foreign exchange or not. This has to be examinedf.

[Ganeshan Kalyani]

The transaction amounts to export of service. No service tax is applicable.

[Himansu Sekhar]

The second one is doubtful, it may discussed thoroughly.

[Rohit Bathwal]

Dear Sir's,

Thanks for your quick replies. With regards to the clarification asked by Mr. Sha, the billing will be done in GBP or USD in both the cases.

Also please guide if we need to get service tax reg. no. if we only have export of services.

Thanks in Advance.

[MUKUND THAKKAR]

 enjoy no service tax...

AI Summary

Export of services: services provided to foreign clients billed in convertible foreign exchange are not subject to service tax. Software development and integration services billed to a UK client in foreign currency are treated as export of services and not subject to service tax. Online sales services carried out for a UK principal, receiving commission and billed in convertible foreign exchange, were also treated as export of services but require confirmation that consideration is received in convertible foreign exchange before final classification.