Is Our Overseas Recruitment Income Taxable? Seeking Advice on Service Tax Obligations

Hello Team,

We have started a small-time consulting company mainly focusing on recruitment services, and we have acquired a few overseas clients. We have successfully placed individuals overseas under a basic agreement where we do not charge any service fees.

Do we need to pay any service tax on the funds received from overseas? Is overseas income taxable? Please help.

Regards, Ram.

I believe yes. As the services are rendered in India, it is a taxable service under service tax.

Warm Regards,
Ca Vikas Goel

Hi,

If they are really to pay service tax, then charge on the gross amount. If not, then pay on the net amount. For example, if the consultancy fee is Rs. 100 and they are willing to pay, then it would be 100 + 10.3 (service tax) = 110.30 on the invoice. If they are not willing to pay the service tax, then the consultancy fee would be 100/110.30*100 = 90.66, and (100 - 90.66) = 9.33 would be the service tax payable by you.

Warm Regards,
Ca Vikas Goel