Whether benefit of cenvat credit in India will allow to the Foreign Firm of CA's?

[Sunil K. Jain]

A firm of chartered accountant in Delhi provides professionsal services to firm of CA's of USA/UK for there clients in UK/USA and get the fee from those CA firms in convertible foreign exchange. If the CA firm in Delhi, liable to charge service tax or not ? If yes then how the foreign firm of CA's will get the cenvat credit in India? Will it make a difference if a Private Ltd. company provide the same services instead of CA firm?

[Guest]

This is export of service, hence no liability on firm in India. Where is the question of availing cenvat credit in India? If CA of USA/UK have an office in India, then they would avail cenvat credit in case they paid in Indian currency, which appears to be not the case here. There is no difference in law on the basis of the constitution of the firm.

AI Summary

Export of services exempts Indian service providers from service tax, so foreign recipients cannot claim cenvat credit in India. Services supplied by a Delhi chartered accountant firm to overseas CA firms, paid in convertible foreign exchange, are treated as export of services and do not attract service tax in India, so the foreign recipient cannot claim cenvat credit; a foreign CA firm's Indian office paying in Indian currency may be eligible to avail cenvat credit, and the supplier's legal form does not alter this position.