Service tax on Overseas contract-reg

[N Balachandran]

Sir,

When Indian company executes the EPC contract outside India through Sub contractor who is also located outside india on back to back basis, what will be implications under Service tax rules?

The payment to Sub contractor is remitted from India in foriegn Currency and the payment from customer is credited to Bank account in India.

Question is here:

1.When indian Company makes the payment to sub contractor who is located outside india , will it attract service tax ?

2. Is indian company liable to be taxed as receiver in india.

Could you please clarify

Regards

N.Balachandran

 

 

 

AI Summary

Place of Provision of Service determines that services provided outside India are excluded from service tax when place is outside taxable territory.
Where an Indian provider engages a foreign subcontractor and the place of provision of the service is outside India, Rule 6A/Export of Service Rules treat the service as export (subject to convertible foreign exchange and independence of establishments) and, from 01.07.2012, the Place of Provision of Services Rules exclude services whose place of provision is outside the taxable territory from service tax; prior to 01.07.2012, services related to immovable property situated outside India were similarly not taxable under the 2006 rules.