Service TAX or Income TAX

maddy 1
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Hi,

I am working as consultant for a company of japan . The company is not registered with RBI. I am confused that i have to pay the service tax as well as the Income Tax or only the service tax.

Please Suggest.

Thanks

contract-amount consultant-income service-tax income-tax
1 Answers

Services provided outside India are exempt of service tax.

To claim the exemption under service tax two points are important, 1. That services will be rendered outside India and 2. Collection should be in foreign currency.

If you want to read the full rule

http://www.servicetax.gov.in/exp-service-rule.htm

Relevant portion

2[(2) The provision of any taxable service specified in sub-rule (1) shall be treated as export of service when the following conditions are satisfied, namely:-
(a)     such service is provided from India and used outside India; and
(b)     payment for such service [x x x] 3 is received by the service provider in convertible foreign exchange.

4. Export without payment of service tax.- Any service, which is taxable under clause (105) of section 65 of the Act, may be exported without payment of service tax.
Mithun Dhali30
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