Applicability of service tax - Category

[Guest]

An Indian Company carrying on the business of publishing Journals – PRINT EDITION and ELECTRONIC VERSION. Electronic journals are available to subscribers through internet. Whether online journal business will be covered under sec. 65(105)(zh) - Data base access and retrivel services. Electronic journals are available to subscriber through portal of their parent Company in USA. On that portal various journals are available, including journals of indian company. Indian company gets income(in foreign currency) in proportion from US company. Whether this will covered in export of services or not. For uploadng journals on internet , Indian comapny pays some charges to a foreign company for data digitisation ( conversion of physical journal to electronic format). Is service tax is payble on these charges as import of service. If yes, in which category. Since the on line income is only form export , service tax on import of services can be get refunded.

[Surender Gupta]

Since the matter is technical and require detailed study. However, one category of online database information and retrieval service is required to be analysed in details to understand this issue. Further, in respect of export or import of such service, since you are getting in foreign exchange from USA, for the contents available on a server outside India, you may qualify for an exporter of service. But whole issue requires a details analysis and scrutiny.

AI Summary

Export of services: classify online journal access and imported digitisation to determine service tax and refund eligibility. Applicability of service tax hinges on whether supplying electronic journals via a foreign portal constitutes database access and retrieval services, whether receipts in foreign exchange qualify as exports of services, and whether payments to a foreign digitisation provider amount to taxable import of services. The response states these characterisations are fact specific, notes that hosting outside India and foreign exchange receipts may support export treatment, and recommends detailed analysis to determine taxability and refund eligibility for service tax on imported services.