Explanation 3(b) to section 65b(44)

Dear Shivani ,

  You Got it Correct 

service tax will be applicable 

(reverse charge - import of service)

yes shivani, thats right

Dear Anjali and Roopali

Thanks for your reply.

But in order to attract service tax there need to be two separate persons.

One cannot render service to himself.

So how come we treat branch as separate entity !

please clear the confusion

Dear Ms. Shivani

In your case Delhi branch is seperate from Head office because it has a seperate Service Tax Registration No. So pay service charges to New York office and pay service tax here because service has been done on taxble terrotory.

One cannot render service to himself 

This general rule is derived from sec 65B(44) of Finance Act

Service means any activity for consideration

==Carried out by a person for another

& includes a declared service

Explanation 3 of the same sec 65B(44) gives 2 exceptions to this rule 

And you have got one of it very well Shivani

Dear Roopali

The exception you are saying will apply only if the the service receiving branch lies in non-taxable territory and service providing branch lies in taxable territory.

am i right?

if yes, then what about the case where both branches lies in the taxable territory (india exclduing J&K).

regards

1st part 

u r talking only imports, other way round will also be considered separate establishments distinct persontoo= exports

2nd part

both branches separate establishments but same assessee(not distict person)

Dear Roopali

No following is the conclusion

1 Brach A (Delhi - Service Receiver) Branch B (New York - Service Provider)

both different persons and service tax applicable to Brach A on reverse charge basis.

2. Brach A (Delhi - Service Provider) Branch B (New York - Service Receiver)

both different persons but no service tax applicable as export of services is exempt.

3. Brach A (Delhi - Service Provider) Branch B (Haryana - Service Receiver)

No service tax as it doesnt qualify to be service as both are same person.

Am i right roopali?

please do confirm.

regards

pt 1 & 3 right

for exports to be exempt https://www.forum.charteredclub.com/threads/service-tax-on-export-of-services.1080/

/articles/reverse-charge-branch--24125.asp

/articles/simplified-approach-to-export-of-services-rules-21307.asp