Import of services - services rendered in Germany

[JOSHIL JAIN]

DEAR SIR, ONE OF MY CLIENT XYZ LTD. IS PARTICIPATING IN FAIR IN GERMANY FOR TEXTILES PRODCUTS. FOR THIS PURPOSE IT PAID APROX. RS. 5,00,000.00 AS REMT FOR FAIR STAND. THE SAME WAS PAID IN FOREIGN CURRENCY TO MESSE FRANKFURT . ALL THE SERVICES TO BE RECEIVED BY MY CLIENT IS IN FOREIGN. WHETHER HIS SERVICES ARE TO BE CONSIDERED AS IMPORT OF SERVICES. PLEASE ADVISE.

[Surender Gupta]

In your case, it can be safely opinioned that the services are being received and used outside India, merely payment is made from India. Further, in case the service is being wholly performed outside India, there is no question of service tax in the category of Import of services.

[Madhukar N Hiregange]

Since the services are provdied and received outside India, in my opinion the same is not taxable in the hands of the recepient. Further the condition for such a service to be taxable in India is based on at least part of the performacne in INdia.

AI Summary

Import of services: services wholly performed and received abroad are not taxable in India when no part is performed domestically.
Import of services for participation in a foreign trade fair, where services are wholly performed and received outside India, is not taxable as import of services in India; payment from India alone does not create tax liability-taxability arises only if at least part of the service performance occurs within India.