Applicability of service tax

In outsourcing deal b/w X India and X LLC ...X India is Service Provider and X LLC(USA) ....Since X LLC(USA) is located outside the Indian taxable Territory service is not taxable in India as the place of provision is outside India........ Place of prov is outside India because service receiver is outside India(As per Rule 3 of PPS,2011)....

As far as the ques of services provided by X Inda to X(USA) .......the same will be trated as export of services provided conditions as specified in Rule 6A of STR,1994 satisfies:

These conditions are :

 Requirements of rule 6A for export of service

¨     Provider of service located in taxable territory and recipient located outside taxable territory

¨     Service should not be in Negative List

¨     Payment should be in free foreign exchange

¨     If branch in India of a company provides some service to another branch outside India, it will not be export service.

Thanks Sir. But the services are provided in India.

and secondly, can't we apply Rule 4 in case of telecommunication services to check the place of provision?

No Rule 4 will not be applicable because Telecom. service is provided by Indian co. in connection with  outsourcing services to Foreign subsidiary....and outsourcing is covered by Business Support service....therefore Rule 3 will prevail and Place of Prov will be location of service receiver which is USA.....

It means there is no liability to pay Service tax on X (India). 

Whether service tax is applicable on X (LLC) and due to reverse charge mechanism, service recipient (Indian client) has to pay it??

 Services provided by Indian co.(on behalf of Foreign co. as an BPO)are not taxable in India...because services are Infact provided to Foreign co so Indian co need not to charge St to Foreign co. bcoz  Place of Provision of Business Support services is USA as per Rule3 of PPS Rules,2012 ....

As far tax liab on Indian clients under Reverse chg is concerned ....yes they are liable to pay ST under RCM as an importer of service where services are imported from USA co.(though actually provided by Indian co.)