service tax on import of foreign contract

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  1. k sreeenu

    k sreeenu New Member

    Dear Sir.

    My query relates to ( WE ARE IN OIL & GAS INDUSTRY A CONTRACT AWARDED TO FOREIGN PARTY TO DO WELL SERVICES THEY ARE HAVING PAN AND SERVICE TAX REGISTRATION IN INDIA BUT PAYMENT IS DONE IN USD AND TRANSFERRED TO CANADA NOW CAN WE KNOW THAT WHETHER SERVICE TAX IS TO BE PAYABLE TO THE PARTY SINCE THY HAVE REGISTRATION IN INDIA OR ITS TO BE RECOVERED UNDER REVERSE CHARGE MECHANISM AND TO BE DEPOSITED THE SAME BY THE SERVICES RECEIVER
     
    Last edited: Sep 22, 2014
  2. Service Tax is payable by the service provider, who collects it from the service receiver. But, under reverse charge mechanism, the service receiver should pay the tax. If your service provider providing service only (not materials supply), then it won't come under Works Contract and you need not to collect the service tax.
     
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