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Brisbane-Lawyer
Brisbane-Lawyer, Solicitor - Admitted 2005
Category: Tax
Satisfied Customers: 14361
Experience:  I did my law degree at the University of Queensland
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Overseas Payment Australia and India

Customer Question

I have a business in Australia. I do business with an IT company in India. I send a lump sum of money (about $2,000) to them. That amount is actually still my money, but in their bank account. When the Indian company charges me for their service, they deduct this amount. Sometimes they buy things on my behalf and keep it for testing, then send it over to me when testing is completed. How is the tax taking into account? Australia has Goods and Service Tax. India have Service Tax and VAT on goods.

1. Do I claim a GST on the money I send out of Australia?

2. India - do they get taxed when they receive my money, or when they charge me for a. service, b. goods?

Thank you kindly.
Nhon from Perth
Submitted: 4 years ago.
Category: Tax
Expert:  Brisbane-Lawyer replied 4 years ago.
1. No.

2. When they charge you for a service, yes. But not when they receive your money.
Customer: replied 4 years ago.
Hi Alex,

Thank you for the response.

With regardin 2. The Indian Company - if its for the service, they pay Service Tax, if its for goods, they pay VAT - is this how it works?

Or do they get charged for Service Tax first, and if I buy goods, they pay VAT on top? This to me looks like its a double tax, so it is not applicable in this way. It is either 1 or the other, not both together?

Thanks.
Expert:  Brisbane-Lawyer replied 4 years ago.
if its for the service, they pay Service Tax, if its for goods, they pay VAT - is this how it works?

That is correct.