08 September 2014
Dear Sir, As per my view, It will be cover under export of service under rule 6A of Service Tax Rules,1994, as provider of service located in the taxable territory, Service receiver belong to outside taxable territory, payment for the taxable service received in foreign currency and the place of provision of service in the taxable territory. Rule 6A does not specify to meet all the conditions from a) to f).
08 September 2014
This is not export of service as service is rendered in the taxable territory. Service tax is applicable even the payment is received in foreign currency.
As per the proviso to old export of service rules, 2005, If the foreign company has his establishment in india to whom service being rendered, issued an Purchase order/sign an agreement for such service from the office located outside India and payment is to be done from there also, It is export of service.
09 September 2014
Now the Rules have been replaced with a set of Rules called place of provision of service Rules 2012 by Notification No.28/2012 dated 20 th June 2012. These Rules now determine” taxable territory” and consequently taxability of a service rendered when either service provider or a receive recipient is located outside India or in J & K.
The Charging Section (section 66 B) of the Finance Act as amended in 2012 specifies that" there shall be levied a tax (hereinafter referred to as the ST) at the rate of twelve per cent on the value of all services,other than those services specified in the negative list,provided or agreed to be provided in the taxable territory by one person to another and collected in such manner as may be prescribed.”
As understood from the above,the main ingredients for a service tax to be levied are -
1. It should meet the definition of "service” as inserted in the Finance Act in 2012.
2. Must not be listed in the "negative list services” defined under section 65D of the Finance Act 1994
3. The services should be provided or agreed to be provided in the taxable territory
4. By one person to another.
By emphasizing on the words "provided or agreed to be provided in the taxable territory", by implication,if a service is not provided in the taxable territory then the same is outside the purview of ServiceTax.
As per your reply, the provision have been amended by PPOS Rules, 2012 which was requested to quote, but not. As per my view, The service being performed in India a taxable teritorry, To a person having or not having establishment in India, The person belongs to foreign origin, The Agreement/contract was finalized from the foreign location, The payment was done in foreign currency, the same shall be export of service and provisions shall apply accordingly. The taxability is not the issue.
11 September 2014
The query is mainly related to applicability of service tax. As service is rendered in taxable territory(India) service tax is applicable.
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