Service tax applicability - services to a foreign company

[Baldev Aggarwal]

Please inform whether the services rendered by a resident Indian to a foreign company having no office in India and receiving the service charges in Foreign Exchange remitted from outside India, will be subject to service tax in India ?

[BARUN BASU]

In the present case service tax is not applicable by virtue of export of service rules 2005 which states if following conditions are fulfilled a) such services is provided from India & used outside India b) payment for such services is received by the services provider in convertible foreign exchange

[Surender Gupta]

There are three categories in which all the taxable services have divided for the purpose of Import and Export of Services. You have to ascertain the appropriate category in which your service is falling. In general, for second and third category, where the recipient is situated outside India and amount is received in foreign exchange, you should be allowed the benefit of export of service tax and not liable to pay service tax.

[rishi mohan]

A resident Indian is not liable to pay service tax on the services rendered to a foreign company located outside India.The services shall be taxable in the country where the company is registered. The amount received in foreign exchange is not subject to service tax as the services were rendered & utilised by the foreign company outside India.

[Prabhakar Vennalaganti]

The crucial point whether service tax is levaible or not is based on wherr the service is actually taking place. If service is rendered in India to a foreign co., who don't have office in India, the service tax is to be discharged by the Indian co., on behalf of the foreign co..

AI Summary

Are services by an Indian resident to a foreign company without an India office subject to service tax? A discussion on a forum addresses whether services provided by a resident Indian to a foreign company without an office in India are subject to service tax. The consensus among the replies is that service tax is generally not applicable if the services are considered exports under the Export of Service Rules 2005, meaning the services are provided from India, used outside India, and the payment is received in convertible foreign exchange. However, one response suggests that if the service is rendered in India, the Indian company may need to discharge the tax on behalf of the foreign company.