Whether export of service is non taxable

RULE 6A (1) - The provision of any service provided or agreed to be provided shall be treated as export of service when

a. the provider of service is located in the taxable territory

b. the recipient of service is located outside India

c. the service is not a service specified in the section 66D of the Act

d. the place of provision of the service is outside India

e. the payment for such service has been received by the provider of service in convertible foreign exchange; and

f. the provider of service and recipient of service are not merely establishment of a distinct person in accordance with item (b) of Explanation 2 of clause (44) of section 65B of the Act.

Now,

The place of provision of service plays an importanrt role in determining the applicability of service tax, In case of export of services the place of provision of services shall be the place of service receiver ,and if the place of service receiver cannot be identified then the place of provider of service shall be taken into account.

Dear Sir/madam,

As per the porvisions of service tax laws regarding the export of service is explained below, If any service tax levied will be avaliable as a input credit under the Notification no 39/2012 is explained in detail. 

In order to ensure that no tax is exported along with export of service, rules have been framed to allow Cenvat credit or Refund or Rebate of Service Tax paid of Input Services and Excise Paid on Inputs. 

Rule 6A of Service Tax Rules, 1994 gives the meaning of “Export of Service”. The provision of any service provided or agreed to be provided shall be treated as export of service when:-

a)      the provider of service is located in the taxable territory,

b)       the recipient of service is located outside India,

c)       the service is not a service specified in the section 66D of the Act,

d)       the place of provision of the service is outside India,

e)      the payment for such service has been received by the provider of service in convertible foreign exchange, and

f)       the provider of service and recipient of service are not merely establishment of a distinct person in accordance with item (b) of Explanation 2 of clause (44) of section 65B of the Act.

Further it is provided that service provided by one establishment of a person located in Taxable territory to another establishment which is located in Non-Taxable territory, these establishments being considered deemed distinct persons as per Explanation to clause (44) of section 65B of Finance Act, 1994; will not be considered as Export of Service.

Thank u

Thanks Harshit & Sai for reply . But i want to know that whether the export of service can be treated as non taxable service not when the service shall be treated as export service.

No,CBEC has 3 eyes,as all the services which are not actually export but are treated as export services such are called as deemed exports.Deemed export benefits is always available for supply of goods, not service deals.

Dear rajat

If the service is exported and fullfills condition under rule 6A then it is exported service or you can say not taxable service.

Regards

Karanjit Singh | +91-7503588224