Liability of service tax in case of service recepient from foreign

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Query-1 Fact A body corporate engaged in the business of export of garments, takes the service of “Lab Testing” from the organization situated out side India and making payment in convertible foreign currency. Query: • Whether the body corporate is liable to pay service tax, on the payment to service provider. • In case the service provider, provides the service in India, where as bills are raised from outside India and payment is also made in convertible foreign currency. Then what about applicability service tax. Query-2 Fact A body corporates engaged in the business of export of garments, takes the services from a person residing outside India for procurement of order and coordinating with the buyer and payment is made in convertible foreign currency. Query: • Whether the body corporate is liable to pay service tax, on the payment to service provider.

AI Summary

Corporate Liable for Service Tax on Foreign Services Under Import of Services Provisions, Sections Clarify Responsibilities A body corporate engaged in exporting garments queries about its liability for service tax when receiving services from foreign entities, specifically lab testing and order procurement. The first respondent clarifies that under the Import of Services provisions, the body corporate is liable to pay service tax if the service provider is based outside India. The recipient is treated as the provider of taxable services, making the services taxable in their hands. The second respondent concurs but suggests a detailed examination of the facts for more clarity on legal provisions.