KPO in India. We'd be converting jpeg images into editable word docs.Would this be liable for service tax?

Question

Dear All,

We're considering of jumping into the KPO Space. We have an offer from a company to get into digital document conversion. The client would be providing scanned jpeg images in large volumes and we'd have to convert these jpeg images into editable word documents.

Would such type of a business service be liable to pay service tax in India? Keen to hear from you.

Entrepreneurially yours,

Aadil Bandukwala
[e-mail]

Answer 1

The liability to pay service tax in India is only on the services notified as taxable services under the Finance Act 1994 as amended.Your activity is not covered under any of the notified services.The list of taxable services can be accessed by you at www.allindiantaxes.com
You are , therefore, not liable to pay service tax in India.

Answer 2

Depends on whom you are billing and how you are billing. If you invoice for your time on hourly basis, then service tax will be applicatble.