Liability of Service Tax - Export of Services

[Asked by Guest]

Dear Sir, I had a query with regards to service tax , we are pharmaceutical marketing company engaged in the activity of International Marketing. DUring the current year we had assisted a US company for Getting loan from Bank of India US Branch and for purpose we had coordinated in Bank of India Head Office Mumbai for sanction of loan. Now the loan has been sanctioned by the Bank and we will be issuing a debit note on the US company towards fees for getting the loan sanctioned. Please advise whether the service tax will be payable by us under export of services rules in the services are rendered in india, loan was disbursed in US & we shall be getting the fees in convertible foreign exchange. Please guide, Thanks and Regards Prashant Bhole

[Surender Gupta]

First it has to be decided that in which category you are liable to service tax. If you are laible to tax under Business Auxiliary Services that your services would remain exempt under the third category as Receipient of such services is Situated outside India.

AI Summary

Export of services: services supplied from India to a recipient abroad may be exempt if classified as Business Auxiliary Services.
Advisory: determine whether the activity is classifiable as Business Auxiliary Services; if so, it falls within the export exemption because the recipient is situated outside India, and the service provided from India to a foreign recipient with payment in convertible foreign exchange would remain exempt under export-of-services criteria.