Export of service


05 August 2013 we are engaged in providing "consultancy engineering service". one of our clients has recd order in Dubai. So, in turn, we are asked to provide service at Dubai. So, we are physically providing services at Dubai but raising bill on our client at Indian address as he has no business place in Dubai. In this case, do we need to charge any service tax on our client?

05 August 2013 In my opinion

By applying the place of provision of service rules

Rule 3 of Place of Provision of Service Rules 2012 defines that the place of provision is recipient of service

Since the service are provided in Dubai. The same would be outside the taxable territory,

Hence not subject to service tax.


05 August 2013 Hi Manish,
The relevant rules applicable in your case are Rule 3, Rule 8, and Rule 14 of the Place of Provision of Tax Rules, 2012

Rule 3 (General Rule): The place of provision of a service shall be the location of the recipient of service

Rule 8: where the location of the provider of service as well as that of the recipient of service is in the taxable territory, shall be the location of the recipient of service

Rule 14: where the provision of a service is, prima facie, determinable in terms of more than one rule, it shall be determined in accordance with the rule that occurs later among the rules

Based on Rule 14, you are covered under rule 8,
Hence Service tax is applicable and to be paid.


The service receiver is not defined under the statute hence as per my view your client is a service receiver who has business establishment in taxable territory .


14 August 2013 Hi Manish

I have slightly different view on this.

Rule 8 condition is location of provider of service and location of recipient of service should be within taxable territory.

In the given case service receiver is not in taxable territory.


Further the Export of services rule has been withdrawn and they are now governed by place of provision of service rules

Further under place of provision of service rule there is no condition that the amount has to be received in convertible foreign exchange


14 August 2013 Hence a stand can be taken that the service receiver is not in taxable territory

Hence not subject to service tax,

15 August 2013 Dear Gopalkrishna sir,
As per my view is that the Service provider is billing to the client who is in the taxable territory hence Service tax is applicable. (by applying rule 8)

Please enlighten us in respect justifying that it covers under Rule 3

Thanks for reply .


16 August 2013 Dear Mr. Ravikumar

My view is that the under rule 8 Both the condition has to be satisfied , That is SP and SR has to be in the taxable territory.

But in the given case the SR is in dubai, Hence not in taxable territory,

Hence my view stands above, that is to say rule 8 doesnot apply.

Thanks for the nice discussion

16 August 2013 Dear Sir thanks for your reply.
still i Stand on my opinion because of billing activity is the criteria.

I allow this query as open so that other experts can express the view, so that we can come to know the exact answer.


18 August 2013 Yes Sir Mr. Ravikumar, Please keep it open



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