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

Is Company B's Invoice to Japan an Export of Service? Opinions Differ on Service Tax Applicability. A Japanese company contracts with an Indian company (A) for machinery overhauling and outsources the task to another Indian company (B). The query is whether Company B's invoice to the Japanese company qualifies as an Export of Service and if service tax should be applied. Two respondents, Mangesh Lokre and Rishi Mohan, state that if Company B receives payment in foreign currency, it is considered an export, exempting it from service tax. However, Taranjeet Singh argues that since the service recipient is in India, service tax should be charged, as it is a destination-based consumption tax.