Renting of servers

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Our company which is an e-commerce portal hires servers from foreign companies. Are we required to pay service tax under reverse charge mechanism for such payments?

As only renting of immovable property is covered under the declared services - Section 66E, is renting of servers covered under the definition of service itself?

Thanks in advance

Replies (3)

Section 65B(44) of the Finance Act,1994 defines Service as:

  • any activity carried out by a person for another for consideration, and
  • includes a declared service,

 Thus the service of renting of servers is covered under the definition.

Since the said service is neither covered under Negative list nor under exemption Notfn, therefore, it appears that,  you are required to pay service tax under reverse charge mechanism for such payments.

 

Mr. Irshaad, 

Thanks for your reply. 

Renting of immovable property but for the declared service definition would not be considered as a service.

In the absence of a inclusion in declared service, can we not assume that it is not covered under the definition of service. 

I mean renting of servers

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