Is service tax applicable on STPI unit (US based call senter)?

Question

I recently join a company in Mumbai. The company is a US based call center and providing services out of India. Company didn’t get registered under service tax Act. Companies not paying any service tax but company’s vendors are including service tax in his bills.

As the service tax not applicable. Company have to pay service tax amount to vendor or not?

Company already paid lot of money in this way, can company get this amount back from service tax department. Further should company continue to pay the service tax to vendor or stop? If it must be stop what certificate company have to issue to vendor, if they demand.

Sir, please give some your valuable time to my mail, and please please provide me guidance.

Thanking you,

Answer 1

Best Answer - Chosen by Voters

If the services provided by your vendor to you is taxable, they will charge service tax to your company.

If you are using these services in relation to export of output services, you can take cenvat credit of the Service Tax paid by you to your vendors. The Cenvat credit can be taken after payment of bill to the vendor. (If the input services received from your vendor is used for rendering both taxable and exempted output services, you are allowed to take only 20 % of the credit).

The Cenvat Credit so accumulated can be used in payment of service tax on domestic service provided, clearance of bonded capital goods / raw material to domestic market (Domestic Tariff Area).

If you are not able to use the cenvat credit towards clearance of goods / services to Domestic Tariff Area, you can file refund claim of service tax paid under Rule 5 of Cenvat Credit Rules, 2004.

Good Luck.

Source(s):

www.servicetax.gov.in

Answer 2

No 100 % not applicable for service tax

Answer 3

Service Tax is applicable within the country and some boundries such as Nepal.

The service has to be paid to the vendor if they are holding the service tax No.

If he fails to give the service tax no. you need not pay.

For your information you can gothrough the website:www.cbec.gov.in

Answer 4

Only those services which are considered as Export of service under "Export of services Rules"are exempt from service tax.
In case of most of the taxable services Export of service is considered when the service is being rendered out of India and the payment is recd in convertible foreign exchange.Click on link below for details
http://allindiantaxes.com/service-tax.ph…
From your query it is not clear as to which taxable service is being provided by you.The question of exemption will arise only when the service being provided is a notified taxable service on the link below:
http://allindiantaxes.com/service-tax-ta…
As far as your vendors are concerned ; the service provided by them is taxable and they are not exempt as it is not export of service

Source(s):

www.allindiantaxes.com