Service tax
H A Patel
(Querist) 30 October 2012
This query is : Resolved
Sir/Madam,
I have a query on Service tax and giving following scenario. Please advise..
An Indian Customer ‘A’ has placed an Order on Indian Supplier ’B’ for Supply of equipment and supervision services for installation & commissioning activities. Currency of the Order is INR. The equipment is to be exported to foreign country under OGL Bond. For affecting export, Indian Customer is to provide CT-1 bond and ARE-1.
On completion of supplies, Indian supplier deputed his Supervisor to Foreign country for supervision activities and raised invoice on Indian Customer for the same. Now, query is whether, Indian supplier is supposed to charge Service Tax on supervision service? Whether, Indian Supplier is liable to pay Service Tax?
Regards
hapatel
Sivadas Chettur
(Expert) 03 November 2012
The location of service is outside India but it cannot be recognised as export under Rule 6A since the payment is not in convertible foreign exchange.So you will be liable to pay service tax. Rule 3 of the PPS rules may have application and hence place of service provider shall be deemed to be the place for taxation.You will be liable.
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