Import of service

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Ritika (Querist)
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14 February 2015 ABC Ltd. an IT(Information Technology Software Service) company is incorporated in india. Its service provider XYZ Ltd. is located outside India. XYZ LTD. is performing service outside India for ABC Ltd. & payment is made by ABC Ltd. in FCE to XYZ Ltd.
My question is whether it will be import of service for ABC Ltd. & will be liable to pay 100% service TAx on Import of service???? bcoz service recipient is located in India and service are not performed in India but outside India.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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14 February 2015 If service is provided out side India, being service provided outside taxable territory service tax not payable.

Ritika

Ritika (Querist)
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14 February 2015 But as per my knowledge Place of provision is relevant and not the place of performance (with exceptions).and place of provision is normally location of service recipient.

Ritika

Ritika (Querist)
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14 February 2015 So it would be an import of service irrespective of place of performance.So ABC Ltd. will be liable to pay service tax under reverse charge.

Pleases clarify.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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14 February 2015 What is the difference between place of provision and place of performance.

Ritika

Ritika (Querist)
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14 February 2015 Place of provision is generally the location of service receiver & place of performance is where they are actually performed.See rule 3 to 12 of place of provision of service rules

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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14 February 2015 If service is rendered and consumed outside India service tax not payable.
https://www.kpmg.com/IN/en/services/Tax/FlashNews/Service-tax-on-services-received-and-consumed-abroad.pdf

Ritika

Ritika (Querist)
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14 February 2015 But services are received by an Indian company but performed outside India on behalf of Indian company.and payment is made by Indian co. to service provider.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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14 February 2015 Who is making the payment is irrelevant.
It is relevant only where the service is rendered and consumed.
See the link.
https://www.ficci.com/events/21136/ISP/Presentation-on-Place-of-%20provision-of-Service-Rules-by-Pratik-Jain.pdf

Ritika

Ritika (Querist)
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17 February 2015 Please see rule 3. As a general rule place of provision of service will be the location of service receiver. In case of Rule 4, we will see the place of performance instead of location of service receiver.

Can you explain B2B & B2C with example??

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