Service tax for overseas jobs

Dear Praba

Normally software consulting services fall under ambit of service tax net.  In your case the services are rendered by Indian entity to overseas entity, therefore the services may qualify as export of service;  which is not liable to service tax.

Please note that for all export transactions service contract is a primary document that needs to be properly reviewed therefore before taking export stand please get the contract reviewed from a service tax consultant.  

Also would request you to please elaborate on nature of overseas jobs and your complete facts or in case you require to have a verbal discussion then please call.

Thanks & regards

Hardeep Singh Lamba

Chartered Accountant

+91-9891535339

Dear Prabha,

You are not clear with your query.

Please clarify whether (i) Your company is doing software  consultant services for a overseas client i.e. sitting in India, the consulting service is being provided - by means of internet / written communication; or (ii) sends software engineers to foreign soil to perform the job there; or (iii) doing consultation service in India to a overseas company, which service the overseas company utilises in India itself.

Software consultancy service is a taxable service under Service Tax Law.(assumed to be taxable on the basis of information provided) 

Import of taxable service is taxable u/s 66A while export of taxable service is exempt subject to the following-

Taxable Services are exported within the meaning Exports of Services Rules 2005 (i.e. service is provided from india and used outside india)  and

payment is received in terms of convertible foreign exchange.

Thank you!

hai

Ramachandran

Thanks for the replay

My company  is doing software  consultant services for a overseas client through internet .

Nothing other then this . It is very small setup .

just we are communicate through internet and do some works .

we are not  involved none other activites !

They send our consultations charges through internet banking .

Am not made any kind of registrations ! 

what kind of tax applicable for us !

Dear Praba

As already provided that services rendered from India to overseas client qualify as export.

Basis your descripttion, you are engaged in rendering software consultancy services via internet. The said service falls under service tax law under taxable service category of Information Technology Software Service (‘ITSS’).

Accordingly, if you satisfy all the following conditions cumulatively then the service would qualify as export, which is not liable to service tax.

(1)    Service is rendered to entity located outside India;

(2)    The recipient of  service is located outside India and

(3)    Consideration of service is received in convertible foreign currency   

However, please note that you must take care of service tax compliances, i.e. taking registration, filing return with appropriate export turnover.

Regards

Hardeep Singh Lamba

Chartered Accountant

+91-9891535339