A CA firm does Due Diligence of an Indian co. in India for a foreign client for the purpose of investment by him in said Indian Co. Draft report is emailed to him abroad and fullReport is handed over to the client in India when he visits India. Is service tax is leviable on the Professional Charges Bill on the client ?
Taxability of domestic professional services: due diligence performed in India is subject to service tax on fees. Service tax applies to professional fees for due diligence performed in India for a foreign client, because the service was carried out within India; drafting and emailing a report abroad and handing over the full report in India do not alter the character of the service as performed in India, and the professional charges are therefore taxable. (AI Summary)