Applicability of service tax

Queries 1516 views 3 replies

Vikash Gupta

Company Secretary

25 Points Joined February 2012

I have a query regarding charging of service tax. my query is as below-

my client is situated in New Delhi and raise an invoice to the Head office of his client (Situated in Gurgaon)
but the goods and services are supplied at its another branch office (situated in Jammu and Kashmir).

So please guide me
Q.1. Is the Service tax is to be charge on this billing?
Q.2. Is it necessary to mention in invoice that the service is to be provide in J&K?
Q.3. Is any separate Agreement or written undertaking is required form service recipient?

Please provide the answer as soon as possible and mention any decided case law if any.
Thanks in advance.

Replies (3)

Ajit kumar Dubey

Taxation Manager

637 Points Joined September 2008

If the service is provided in J&K area then no service tax is to be paid by the service provider as an export of service under Rule 6A of Service Tax Rules 1994, provided that the service provided is not in the course of intermediaries.

Swami Ayyappa Nuli

TAX ADVISOR & CONSULTANT AT G.S.T SUVIDH

1372 Points Joined June 2012

AS SERVICE TAX IS DESTINATION BASED CONSUMPTION TAX,IN THE GIVEN CASE IF SERVICES ARE CONSUMED IN JAMMU AND KASHMIR,NO SERVICE TAX IS APPLICABLE.

IF U PROVIDE SERVICES IN JAMMU AND KASHMIR AND IF SUCH PERSON CONSUMED OUT SIDE JAMMU AND KASHMIR THEN SERVICE TAX IS APPLICABLE

Vikash Gupta

Company Secretary

25 Points Joined February 2012

Thanx Mr. Ajit Kumar Dubey andnuli swami ayyappa for your post....

As I Know Rule 8 of Place of provision of Service Rules, 2012 will apply according to which-

Place of provision of services where provider and recipient are located in taxable territory.-

Place of provision of a service, where the location of the provider of service as well as that of the recipient of service is in the taxable territory, shall be the location of the recipient of service.

According to this rule If Head Office makes the Payment in respect of Services rendered in Branch (J&K) then Head office (Gurgaon) is to be treated as the receipent of service.
Hence, Service Tax should be levy.

Further Views are required...

Thanks & Regards-

CS Vikash Gupta