Service Tax — Applicability in the State of Jammu & Kashmir - Service Tax - V/DGST/03/GEN/INS/01/2004

Service Tax Applicability in the State of Jammu Kashmir [Service Tax Instructions F. No. V/DGST/03/GEN/INS/01/2004, dated 17-8-2004] Subject : Applicability of Service Tax in Jammu Kashmir Kindly refer to your letter of NIL no dated 20th July on the subject cited above. Section 64 of Chapter V of the Finance Act, 1994 deals with the levy of Service Tax and excludes the applicability of Service Tax to the state of Jammu and Kashmir. The Central Board of Customs Excise (CBEC), New Delhi vide Circular No. 56/5/2003, dated 25-4-2003 has clarified that Service Tax is a destination based consumption tax and the principle of consumption of services would determine the liability of Service Tax. Therefore, the insurance services rendered to the clients having assets outside the state of Jammu and Kashmir, by M/s. New India Assurance Company Ltd., Jammu would be liable to Service Tax. However, services provided to the clients having assets in state of Jammu and Kashmir, by your Jammu Branch are not liable to Service Tax.