Liability of service tax for service provided outside india
This query is : Open
10 December 2014
Hello all,
One of my friend is running firm which creates websites for the companies situated outside india
and his turnover is more than 10 lacs
Now, my question is that is he liable for service tax ?
and is liable to get registered under service tax act ?
Pls reply
One of my friend is running firm which creates websites for the companies situated outside india
and his turnover is more than 10 lacs
Now, my question is that is he liable for service tax ?
and is liable to get registered under service tax act ?
Pls reply
10 December 2014
the ans is yes he is liable.
Message likes :
1 times
10 December 2014
Agreed yes it will be applicable.
As per Rule 3 of place of provision of services,
location of Sp will be considered
As per Rule 3 of place of provision of services,
location of Sp will be considered
Message likes :
1 times
10 December 2014
Sir, if possible pls explain in detail with provision relating to it .....
As i thought it will be exempted as export of services
As i thought it will be exempted as export of services
11 December 2014
In this case when service is provided outside india then service provider has to bear the service tax
11 December 2014
Mr Dhawal - Al though it is Export of service but its Place of provision is falling u/r 3 -i.e. location of SP.
Hence taxable
Hence taxable
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)
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)
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Difference between Date of Payment and Date of Deduction?
- TDS CREDIT MISMATCHING
- Buy back of shares u/s69
- Tax Audit Applicability – Newly Formed Partnership Firm with Profit Below 6%/8%
- Unregistered suppliers utility
- ADDITION OF CHALLAN IN TDS RETURN FORM 140
- TODAY INCOME TAX SITE IS NOT WORKING ANY OFFICIAL EXTENSION
- LIC maturity claim whether taxable
- URGENT-Eligible leaves being shown as 24 days for 3 years Articleship instead of 156 days in 108
- FCRA 6 E- Intimation
- EXPORT COMMERCIAL INVOICE HSN CODE
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
