Intermediary service under rule 9 of place of provision rule

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K. Rawat (Querist)

02 December 2014 Do the service provided by BPOs and KPOs fall under the definition of Intermediary services for Rule 9 of place of provision rules?

CA Kumar Mukesh

CA Kumar Mukesh (Expert)

02 December 2014 It will not fall under the rule 9 of Place of Provision rules, it will fall under the rule 3 of place of provision rules.

As per rules 3 place of provision will be Location of Receiver of Services

CA Hardik Bunha

CA Hardik Bunha (Expert)

02 December 2014 Mr. kumar mukesh i think u r little confuse about rules,

BPO will be liable under rule 9.

rule 3 applicable only when if services not identified in rules 4 to 14.

CA Hardik Bunha

CA Hardik Bunha (Expert)

02 December 2014 Mr. kumar mukesh i think u r little confuse about rules,

BPO will be liable under rule 9.

rule 3 applicable only when if services not identified in rules 4 to 14.

CA Kumar Mukesh

CA Kumar Mukesh (Expert)

02 December 2014 Dear Mr. Hardik be clear when you provoke someone. Read the definition of Intermediary given under rule 2(f) of Place of provision rules 2012. It is reads as under “intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the ‘main’ service) between two or more persons, but does not include a person who provides the main service on his account.;

The definition is exhaustive. Therefore in case of service receiver is located outside of India, then it will amount to Export of Services within the meaning given under rule 6A.
Further for your information, Read the ruling Delhi High Court in case Wipro Limited

CA Hardik Bunha

CA Hardik Bunha (Expert)

03 December 2014 Mr. Kumarmukes case in delhi high court is related to keep documents for cenvat credit.

in that case there was no starting and ending point in relation to "contineous supply of service"

Here the situation is different.
So before giving advice to someone else you have to be clear.

In the case of BPO service provided is consider as main service.

Rule 9 100% applicable in this case.

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CA Hardik Bunha

CA Hardik Bunha (Expert)

03 December 2014 Again i tell u refer case law of Wipro Ltd.

If u have any doubt...

CA Kumar Mukesh

CA Kumar Mukesh (Expert)

03 December 2014 Yes you correct that case was on issue of procedural aspect of the allowability of Refund of Service Tax on services used for the purpose of the Export of Services.

But forget to understand that in that case also Wipro was involved in providing BPO services for the service receiver located outside India.

The above BPO services was treated as Export of Services within the meaning of rule 6A of Service Tax Rules, 1994

I think this would be sufficient, if not, kindly quote any relevant case law

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K. Rawat

K. Rawat (Querist)

05 December 2014 thank you for the reply. we have a client who is providing engineering services in india to electricity companies. it is a 100% subsidiary of a japanese company. on the invoice only the name of indian subsidiary co. has been mentioned. all the payments are recd by the co. in their japanese account in BOTM bank in Yens. All the other details of japeanese co. have been mentioned on the invoice and nothing about the subsidiary co. but they are not charging service tax from their clients. they are of the opinion that this is import of srvices. but since they have a registered office in india, would this be an import???

CA Kumar Mukesh

CA Kumar Mukesh (Expert)

05 December 2014 I am not getting you problem properly.
Clarify the following aspect.
1. Who is the service provider to Electricity Company (foreigner company or its subsidiary).
2. Who the service receiver.

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