11 December 2014
Rule 3 of POPS, 2012 speaks of place of provision in general. All other rules are specific in nature.
I have laid out Rule 3 for analysis;
Place of provision generally.- The place of provision of a service shall be the location of the recipient of service:
Provided that in case the location of the service receiver is not available in the ordinary course of business, the place of provision shall be the location of the provider of service.
After reading paragraph 1 it is clear that the place of provision will be considered that of the service receipient and not service provider. In our case the firm is engaged in developing websites for clients based out of India. The place of provision in such cases would be out of India and hence would be treated as export.
Taxability:- Since the services are provided out of India they would be exempt subject to: *Provider is in taxable territory (Condition Satisfied) * Receipient is located os India (Condition Satisfied) *Service is not in Negative List (Condition Satisfied) * Place of Provision of Service is outside India (Condition Satisfied u/r 3) * Payment has been received in foreign exchange (Condition needs verification)
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