Export of Service - Tax applicability under which category

[Guest]

Dear Sir, We are a newly formed company engaged in the activity of international marketing/manufacturer and exporter onloan license basis , till date there were no operations from the business and nil turnover how ever in current year we are expecting following income : 1) Amount to be received from US Listed company as finder fees for identifying strategic investor who will be investing amount is the equity of US company. 2)Amount to be received from the foreign Company towards fees for coordination with Bank of India Head office in india for getting loan to the US Company from Bank of India New York Branch. Please advise us with regards to service tax with regards to export of services and category under which applicable. We have yet to get registered under service tax which we will be doung immediately. Thanks and Regards Prashant Bhole

[Surender Gupta]

Your query requires a detailed analysis of facts, terms and circumstances before arriving at any decision. However, in general, if a service which is delivered outside India, used outside India and payment is received in India in convertible foreign exchange, it is exempt from service tax. Further, apperantly, your service is falling under the category of Business Auxiliary service as well as Business Support Services.

AI Summary

Export of service exemption applies where services are delivered and used outside India and paid in convertible foreign exchange Export of services is exempt from service tax when the service is delivered outside India, used outside India, and payment is received in convertible foreign exchange. The queried activities-finder's fee and coordination for bank loan-appear to be Business Auxiliary Services and Business Support Services, but exemption depends on factual verification of delivery, use, and payment terms.