Export of services

[LALIT MUNOYAT]

An Indian citizen is retained by a company in Italy to explore market potential in India and abroad also. He is paid euro 5000/- per month in convertible foreign exchange. He negotiates with potential customers and if, successful, the company directly supplies the product to the customer. Whether the negotiations are successful or aborted, he will get his remuneration from the company. He is not concerned with the supply or its payment by the customer. He is directly concerned with the Italy company. In a way he is providing services to the company in Italy and getting the consideration from Italy in convertible foreign exchange. Is this a case of export of services? Clarification is highly solicited.

AI Summary

Export of services: services from India to a foreign recipient with place abroad and payment in convertible currency may qualify.
Export of services requires that the supplier be in India, the recipient be located outside India, the place of supply be outside India, and payment be received in convertible foreign exchange. Under the facts - an Indian contractor engaged and paid by an Italy company in convertible currency - the service will qualify as export where the place of supply is the foreign recipient; however services performed within India or characterised as intermediary services, or where the person is an employee, may be taxable domestically and require contract specific analysis.