Service tax on animation services

Hi Pranay,

Please refer to the following:

1. As per Service tax law, a service is only taxable when provided in India. The place of provision of service is determined by Place of Provision of Services Rules, 2012 (PPSR). PPSR prescribes for several specific rules for specific services, and a general rule for services other the specific ones. I believe your service or designing and preparing animation does not fall under any of the specific rules, thus, should be governed by the general rule, wherein the place of provision is determined to be the location of service recipient. In your case, Company A has contracted to provide its services with Company (B), which is located outside India. Thus, your services are deemed to have been provided outside India. Therefore, not taxable. Further, since, you are receiving amount in foreign currency and the services are provided outside India, such services should qualify as ‘export services’ under Rule 6A of the Service Tax Rules, 1994 and thereby, making you eligible to claim refund of the Cenvat credit paid on input services.
2. Already answered in the first query.

Thank you Vikas for the information which is very useful.

Further to above, my query is the services ( i.e. animation ) are being provided to Company B, which is located out side India, and then company B telecasts such animation in India.

Hence the services of Copmany A are ultimately used by company B to provide Output services in India.

1) Will it stiil fall under Export of Services?

2) Will Rule 8 of Place of Provision of Services does not apply ( Rule 8 - Where Service Provder and receiver are both in Taxable tarriatory then the place of provision of Services is In India?

Please Advise.

Thanks and regards,

Pranay Parmar.

1. Yes
2. As you yourself have said that the recipient is located outside India, irrespective of the fact where it is telecasted. Thus, Rule 8 would not be applicable. You cannot be held liable for the content to be telecasted in India or outside India. It is the decision of Company B. Thus,

Thank you so much Vikas. It was really helpful and I can say that my querry is resolved. 

Thanking you once again.

Regards,

Pranay Parmar