Foreign Service Tax - Pharmexcil seeks clarification
THE Pharmaceuticals Export Promotion Council of India (Pharmexcil) has sought clarification from Service Tax department on the applicability of service tax on reverse charge basis on transactions undertaken outside India by non-trading offices (NTO) and subsidiary companies of Indian pharma companies.
They want to know whether the Indian parent company is liable (pre and post July 2012) to pay service tax in India on reverse charge basis on transactions of service undertaken outside India by NTO established outside India. They also want to know whether the Indian parent company is liable (pre and post July 2012) to pay service tax in India on reverse charge basis on payments of marketing fees (for marketing services provided outside India) made to a subsidiary company outside India.
The Government should first be clear on what is export and what is import of service and then drill into their officers. The amount of litigation this simple issue has generated is mind boggling.