Payment of service tax on reversed charge method -Reg

[vinay wakde]

We are exporting finished goods to foreign country & raising the commercial invoice in the name of foreign buyer. While receiving the payment, the foreign bank deducted some remittance amount. Whether such remitted amount  is within the scope of  recovery of  service tax from us on reversed charge method? Whether Input service credit is eligible after payment of service credit.

Regards,

 

VINAY

AI Summary

Reverse charge liability on remittance deductions: exporter generally not liable when foreign bank charges inter-bank fees.
Bank remittance deductions are characterized as banking charges between banks and not services provided to the exporter; therefore, such deductions do not ordinarily attract reverse charge service tax liability on the exporter. A precautionary approach noted is voluntary payment of service tax and claiming CENVAT credit on input services to avoid litigation.