11 February 2012
Company A is registerd in Delhi. It enters into an agreement with Company B which is also registered in Delhi. B has a branch in J&K. A provides services in J&K branch of B but issues invoice at Delhi head office. Is service tax applicable to this transaction?
11 February 2012
Service tax is destination based consumption tax. As per Section 64 of Finance Act, 1994 if services are provided in J & K then it will be out of purview of service tax irrespective of location of service provider and service receiver.
Therefore, In this case service tax is not applicable.
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