Export of service

[MANOHAR KALBURGI]

Dear sir,

1. Indian based Pvt Ltd company gives manpower supply to Singapore based company (Indian company is associate of Singapore company), manpower supply is at par i.e no margin is added on such employee cost which recovered from Singapore based company.

2. does this tantamount export of service ? and No ST triggers.

3. If not whether we are eligible to claim exemption under mega exemption provided by ST.

3. Suppose if Indian company is not an associate entity of Singapore company, what are the tax implications?

Thanks in Advance

[KASTURI SETHI]

SH.MANOHAR KALBURGI JI,

Query-wise reply is as under:-

Q.No.2 : It does not qualify as export of service in terms of Rule 6 A (1) (f) of Service Tax Rules,1994

Q.No.3 : No exemption is admissible under mega exemption notification no. 25/12-ST dated 20.6.12 as amended from time to time. Manpower supply does not find place in this notification.

Q.No. 4: If Indian Co. is not an associate company, then it will qualify as export of service subject to fulfillment of other conditions laid in Rule 6A of Service Tax Rules, 1994 .

Also see the definition of 'associate company' under the Company Act, 2013.

[MANOHAR KALBURGI]

Dear sir,

Thanks for your valuable opinion. It is much appreciated!

[KASTURI SETHI]

SH. MANOHAR KALBURGI JI,

I am all praise for your etiquette (nay virtue) of expressing gratitude.

Regards,

K.L.SETHI

AI Summary

Export of service: manpower supply to an associate company not treated as export; non-associate status may change treatment. Supply of manpower by an Indian private company to an overseas related entity, billed at cost without margin, does not qualify as export of service under the Service Tax Rules and is not eligible for the mega exemption notification; if the Indian supplier is not an associate of the overseas recipient, the supply may qualify as export subject to fulfilment of the Service Tax Rules' conditions and the statutory definition of associate company in the Companies Act, 2013.