Service tax

Querist : Anonymous (Querist) 20 September 2011 This query is : Resolved
Dear learned Members,

In case of contract of services with foreign entity (Companies incorporated in Nepal, Bhutan etc.), does liability towards government in respect of Service Tax arises?

please elaborate in both the cases where answer is YES OR NO.

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Guest (Expert) 20 September 2011
Your question is not clear, whether you are the service provider to the foreign entities or the foreign companies are the providers of service to you?

R.Ramachandran (Expert) 20 September 2011
If you want a proper answer, then you should also come forward with complete facts - (i) what is the nature of service; (ii) where the service is being provided; (iii)whether the foreign entity is having any office in India etc.

Querist : Anonymous (Querist) 20 September 2011
we are providing construction services to the companies incorporated in Nepal and Bhutan.

those companies do not have office in India.

But, What if they would have their office in India?

Shailesh Kr. Shah (Expert) 20 September 2011
In which places, you are providing construction services ?

Querist : Anonymous (Querist) 20 September 2011
Nepal as well as in Bhutan

R.Ramachandran (Expert) 20 September 2011
Since it relates to immovable property in foreign soil, it will qualify as export of service under Category(i) and therefore would be exempt from Service tax PROVIDED THE CONSIDERATION IS RECEIVED IN FREELY CONVERTIBLE FOREIGN CURRENCY. If the consideration is not received in freely convertible foreign currency, then you as service provider is liable to pay the service tax.