Online information database service

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Querist : Anonymous

Querist : Anonymous (Querist)

10 June 2017 My client is service provider under ONLINE INFORMATION & DATABASE SERVICE.
Client is providing this service to Outside India i.e. Service Receiver from non taxable territory, Amount Realized in foreign Currency.

Now, my question is that whether this will be called as Export of Service under the Provision of GST, If yes then Assessee will get Exemption from GST liability.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 June 2017 This will not be called as export of service GST is payable under reverse charge.

Querist : Anonymous

Querist : Anonymous (Querist)

10 June 2017 (6) “export of services” means the supply of any service when,––
(i) the supplier of service is located in India;
(ii) the recipient of service is located outside India;
(iii) the place of supply of service is outside India;
(iv) the payment for such service has been received by the supplier of
service in convertible foreign exchange; and
(v) the supplier of service and the recipient of service are not merely
establishments of a distinct person in accordance with Explanation 1 in
section 8;

As per above definition Assessee comply all the condition of export of service.

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 June 2017 As per the notification 46/2016-Service Tax it will not fall under export of services.

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Querist : Anonymous

Querist : Anonymous (Querist)

10 June 2017 But as per this notification:-

"At present services received in taxable territory in India from outside the taxable territory by Government, a local authority, a governmental authority or an individual in relation to any purpose other than commerce, industry or any other business or profession are exempted [cross border B2C (business to consumer) services provided in taxable territory]. On the other hand, services received by other persons in taxable territory from non-taxable territory [cross border B2B (business to business) services] are taxable under reverse charge i.e. service recipient in taxable territory pays tax. Further, in view of Place of Provision of Service Rules, 2012 rule 9(b), with respect to online information and database access or retrieval services [OIDAR], the place of supply is location of service provider and thus such cross border B2B/B2C services provided by a person in non-taxable territory and received by a person in taxable territory are outside the levy of service tax.

2. In this context, kind attention is invited to notification No. 46/2016-ST, 47/2016-ST, 48/2016-ST and 49/2016-ST all dated 9th November, 2016. These notifications shall come into force with effect from 1st December 2016, whereby service tax would be chargeable on online information and database access or retrieval [OIDAR] services provided by any person located in non-taxable territory and received by Government, local authority, governmental authority, or an individual in relation to any purpose other than commerce, industry or any other business or profession [cross border B2C (business to consumer) OIDAR services provided in taxable territory]."

IN our Case Service Provider are located in Taxable territory. And Service Receiver is located in Non taxable Territory. And Service Provider are receive payment in Foreign currency.

In this case whether this will be considere under EXPORT OF SERVICE or not???

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 June 2017 Export of service rules has been replaced by POP Rules.
In the same notification the amendment relate to you is,
in rule 3, in the proviso, after the words “in case”, the words “of services other
than online information and database access or retrieval services, where” shall be
inserted;

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Querist : Anonymous

Querist : Anonymous (Querist)

10 June 2017 Sir, I understand this provision but my confusion is that in above notification service receiver are located in India. and service provider are located outside India but in our case its opposite. in my case service provider located in taxable territory and service receiver located outside India.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 June 2017 Prior to the notification your case is liable for service tax the same continues. See POP rules
9. Place of provision of specified services.-
The place of provision of following services shall be the location of the service provider:-
(a) Services provided by a banking company, or a financial institution, or a non-banking financial company, to account holders;
(b) Online information and database access or retrieval services;
(c) Intermediary services;
(d) Service consisting of hiring of means of transport, upto a period of one month.

Now 9(b) deleted and the above provision is shifted to Rule 3.

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