Liability of service tax, Service Tax

[shatrughan sinha]

Dear Sir We are an STPI unit & registered in the Service tax unit under "Scientific & Technical Consultancy".Our Export services is exempt under the Export of Service Rule 1994. The matter is: Suppose we have a foreign customer to whom we have raised the Invoice. Now our foreign customer is denying to pay the amount due to financial reason or whatsoever,therefore we didnot received the money within the stipulted period of 6 months. Now my Question is : I the money will not be received within 6 months time,then whether we are liable to pay the service tax on invoice amount as told by Service Tax Department. Need the expert opinion indication the notification no of Service tax or Export of Service Rule 1994.

Posts / Replies

[Pradeep Khatri]

Your should file an application for seeking extention of time for realisation to RBI through AD.Further, if you are not able to realise forex within extended time period then you can write-off this amount but to the extent of 10% of the amount due in the financial year. Accordingly inform DC at STPI and Commission of Service Tax that you have writen-off the amount as per the Master Circular No 09/2008-09.

[shatrughan sinha]

Dear Mr Pradeep I am very glad to see your instant reply. I was not aware of the fact that time limit for the export realisation has been increase to 1 year vide the said circular of RBI. Also I got through the write off procedure & the way through which we can seek the extension of time limit beyond one year. I am realy very grateful to you for this important aspect. For any update in the matter of STPI unit will be greatly welcome. My e-mail id is [email protected]

[Pradeep Khatri]

Dear Sir, Indirect Taxation is my core area of practice. We are providing consultancy on STPI,SEZs, EOUs, Customs, Central Excise, VAT, Service Tax to many companies. We provide expert opinion on the above subjects on a nominal fees. In future you can contact us on [email protected] Regards, Pradeep Khatri, Consultant - Indirect Taxation, [email protected]