Export Of Service Rules

[Dhirendra Srivastava]

I had a query If a Japanese Company recieves a contract of Overhauling of machinery from Indian Company( Say A ) and the the Japanese Company outsource that contract to the another Indian Company ( say B ). My query is that when the Indian Company ( B ) will raise the invoice to Japanese Company, Will it be treated as Export of Service and accordingly whether we need to charge the service tax.

[Snehal Kulkarni]

If the Company B is receiving the Payment for Service in Foreign Currency, then it will be treated as Export of Service.

[rishi mohan]

Export of services shall be treated if the payment for service executed is in foreign currency. If the payment of services performed are in foreign currency then there is no need to charge service tax.

[Taranjeet Singh]

Dear Dhirendra ji,

I am of the opinion that the servivce recepient co A is in India, and service tax being a destination based consumption tax, service tax need to be charged by co B while raising the invoice to Japan. I may differ with many of my colleagues.

Taranjeet Singh chandigarh

AI Summary

Export of services: qualification depends on foreign currency payment and recipient location; absent that, service tax may apply.
Qualification as export of services depends on the location of the service recipient and receipt of payment in foreign currency; if payment is in foreign currency and the effective recipient is outside India, the transaction is export and not subject to service tax, but if the recipient is a domestic entity or payment is not in foreign currency, service tax may apply.