TMI BlogRELEVANCE OF LOCATION IN SERVICE TAXX X X X Extracts X X X X X X X X Extracts X X X X ..... RELEVANCE OF LOCATION IN SERVICE TAX - By: - Dr. Sanjiv Agarwal - Service Tax - Dated:- 31-10-2014 - - Finance Act, 2012 w.e.f. 1-7-2012 has inserted section 66C w.e.f. 1-7-2012 which provides for determination of place of provision of service having regard to the nature and description of various services. The Place of Provision of Services Rules, 2012 shall determine the place where suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h services are provided or deemed to have been provided or agreed to be provided or deemed to have been agreed to be provided. It may be noted that with the notification of Place of Provision of Services Rules, 2012, Export of Services Rules, 2005 and Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 stand rescinded. The Finance Act, 2012 defines what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is taxable territory and non-taxable territory . Non-taxable Territory (Clause 35) and Taxable Territory (Clause 52) According to clauses of section 65B of the Finance Act, 1994 , following meanings have been given to non-taxable territory and taxable territory: A non-taxable territory means a territory which is outside the taxable territory and taxable territory means the territ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory to which provisions of Finance Act, 1994 apply. Taxable territory has been defined in sub-section 52 of section 65B . It means the territory to which the provisions of Chapter V of the Finance Act, 1994 apply i.e. whole of India excluding the state of Jammu and Kashmir. Non-taxable territory is defined in sub-section 35 ibid accordingly as the territory other than the taxable territo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry. Relevance of Location The location of a service provider or receiver (as the case may be) is to be determined by applying the following steps sequentially - (a) where the service provider or receiver has obtained only one registration, whether centralized or otherwise, the premises for which such registration has been obtained; (b) where the service provider or receiver is not co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vered by (a) above: (i) the location of his business establishment; or (ii) where services are provided or received at a place other than the business establishment i.e. a fixed establishment elsewhere, the location of such establishment; (iii) where services are provided or received at more than one establishment, whether business or fixed, the establishment most directly concerned with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provision or use of the service; and (iv) in the absence of such places, the usual place of residence of the service provider or receiver. CBEC Clarification According to CBEC Letter F.No. 334/1/2012-TRU dated 16.03.2012 explaining the Finance Bill, 2012 amendments, in order to determine whether the place of provision of service is in taxable territory, following questions/step ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s may be addressed by the assessee - 1. Which rule applies to my service specifically? In case more than one rules apply equally, which of these come later in the order given in the rules? 2. What is the place of provision in terms of the above rule? 3. Is the place of provision in taxable territory? If yes, tax will be payable. If not, tax will not be payable. 4. Are you located in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the taxable territory? If yes, you will pay the tax. 5. If not, is the service receiver located in taxable territory? If yes, he may be liable to pay tax on reverse charge basis. 6. Is the service receiver an individual or government receiving services for a non-business purpose, or a charity receiving services for a charitable activity? If yes, the same is exempted. 7. If not, he is liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to pay tax. 8. If both are out of India, no tax is payable. The service providers and service receivers should therefore, follow the above rules for determining the tax liability. - Reply By satbir singh wahi as = Sir What is the position of sales agent located in France and providing orders to Indian company and receiving commission from India. Whether reverse charge applicable to I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndian company on foreign agent commission paid. Dated: 1-11-2014 Reply By Dr. Sanjiv Agarwal as = Dear Sir, This transaction appears to be liable for reverse charge as per entry No. 10 of the Notification No. 30/2012-ST, dated 20.06.2012. Regards, Archana Chitlangia Dated: 5-11-2014 Reply By Ajay Sharma sharma as = Dear Sir Whether Web hosting service received from the Non Taxabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Territory in to the taxable territory is liable for service tax , since the location of service provider is out of taxable territory Ajay Sharma Dated: 19-12-2014 - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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