Service Tax on Commission to be recieived from Foreign Subsidiary

[Pradeep Jain]

Our Company  had issued a corporate guarantee  to Foreign Bank at out side of India on behalf of our subsidiary in Switzerland, AVTEC (Europe) Power-train Limited. For this purpose we have raised an invoice of CHF 71,877/- on our subsidiary on 31^st Mar 13 for commission for providing the above said  Corporate Guarantee

Please advice whether service tax will be applicable on the same.

 Regards

 

Pradeep Jain

[YAGAY andSUN]

No it will be treated as Export of Service. For details please also check Place of Provision of Services read with Point of Taxation Rules

AI Summary

Corporate Guarantee for Swiss Subsidiary Considered Export of Service, No Service Tax Applicable. Review Provision and Taxation Rules. A company issued a corporate guarantee to a foreign bank for its Swiss subsidiary and invoiced CHF 71,877 for the commission. The query seeks advice on whether service tax applies to this transaction. The response clarifies that it will be treated as an export of service, implying that service tax is not applicable. The responder suggests reviewing the Place of Provision of Services and Point of Taxation Rules for further details.