Place of provision of service

What is the place of provision of service when service is provided in non taxable territory and payment is made in taxable territory??
Replies (4)

I think the service would be exempted in that case

Please refer to the charging section - Sec. 66B, as below:

If the service can be said to be provided outside the taxable territory, then it would not be taxable. However, the same has to be confirmed with reference to Place of Provision of services Rules, 2012, considering the nature of service as per and the rule applicable.

Charge of service tax on and after Finance Act, 2012.

66B . There shall be levied a tax (hereinafter referred to as the service tax) at the rate of twelve per cent on the value of all services, other than those services specified in the negative list, provided or agreed to be provided in the taxable territory by one person to another and collected in such manner as may be prescribed.

The place of provision of service depends on the nature of service as specifed in Place of Provision of Service Rules, 2012. In most cases, being a destination based tax, the location of the service receipient is the place of provision.

If as per rules, the place of provision of service is in non taxable territory, then no service tax is leviable on the same.

Thanks a lot for your valuable reply

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