31 January 2013
We take user licenses from a foreign company for a selected section of its website containing research pages and expert analysis. We also hold tele-conferences with them to get opinions on a particular subject. We send Draft documents via email to them and get expert opinions on them. For the above, We have made an annual contract for a certain fee to be paid in US Dollars in quarterly installments. Their Invoices are in US Dollars and do not include service tax. The agreement also provides that they would receive the agreed fee as net and all the taxes whatever applicable, will be extra. My question is that whether this is liable to Service tax as a service receiver ? Please reply soon.
The First part of your query ie online access of webpages falling in Rule 9 of Place of Provision of Service Rules,2012 and the rest of Services are falling in Rule 3 of above rules. Looking at the dominant nature of services the above services are covered in Rule 3 and hence the as per reverse charge you have to pay tax on the same.
See Guidance note of CBEC on the above issue and Place of Provision of Services Rules,2012.
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