WHETHER EXPORT OF SERVICES IS EXEMPTED FROM SERVICE TAX? IF SO, WHAT CONSTITUTES EXPORTS?
The taxable services which are supplied within India except Jammu and Kashmir are leviable to Service Tax. Thus all the taxable services exported outside India are not leviable to Service Tax and therefore exempt. Service Tax is a destination based tax therefore if the services are consumed abroad, they are covered under export and are not leviable to Service Tax. For example if a Management Consultant provides the consultancy to a foreign company situated outside India, it will constitute direct export. Or if an Indian company through its branch office abroad provides service there, it will be export of service. But a foreign company coming to India and availing taxable services in India, the Service Tax will be leviable as it is not export of taxable service. Similarly a foreign tourist coming to India and availing taxable services, Service tax is leviable as there is no export of service in this case.