Service tax applicability - services rendered outside India

[shankar narayanan]

If the company bidding for services to be provided outside the country, then service tax is not applicable, if the quote or order is in normally acceptable foreign currency like a USD or GBP or EUROS,Since the Bid is proposed to be quoted in USD or Euro which is an Export of Service, hence Service Tax is not applicablable. Other currency like a Bhutaneese or a Nepali or a Bangladeshi will attract service tax even though services are given outside india. My Query: Whether the assessee will get the service tax relief, if the company gets the money in Nepali or Bhutani currency?

AI Summary

Service Tax Not Applicable on Services Paid in Convertible Foreign Currencies; Export of Services Rules, 2005 Clarified A query was raised regarding the applicability of service tax on services rendered outside India, specifically when the payment is in foreign currencies. It was noted that service tax is not applicable if the payment is made in widely accepted foreign currencies like USD or Euros, as these are considered exports of service. However, payments in currencies like Nepali or Bhutanese might attract service tax. A response clarified that under the Export of Services Rules, 2005, there are no restrictions on receiving convertible foreign exchange from Nepal or Bhutan, and benefits are available if payment is received in convertible foreign exchange.