Service tax leviability on Testing and analysis charges recovered from Foreign buyers.

[samiuddin ansari]

Hello Good morning,

My query is whether service tax is chargeable on income received from Foreign parties in Euro for the processing charges i.e Testing and analysis charges made on goods supplied to foreign supplier. Since, services were performed in India i.e. taxable territory and customer situated in foreign territory i.e non-taxable territory. whether service tax is leviable on such income. As CERA audit team is emphasising for payment of service tax alongwith interest and penalty. We solict your valuable guidance in to the matter at the earliest.

Thanks with regard.

AI Summary

Debate on Service Tax Applicability for Testing Services in India Under Place of Provision of Service Rules, 2012 A query was raised regarding the applicability of service tax on testing and analysis charges received in Euros from foreign buyers for services performed in India. The discussion included differing opinions: one view suggested that since the service is an input for exported goods, no service tax is payable. However, others argued that because the service was performed in India, a taxable territory, service tax should be levied, supported by a cited judgment and the Place of Provision of Service Rules, 2012. The forum sought clarity on whether service tax, along with interest and penalties, should be applied.