Shivani (Learner) (1881 Points)
19 March 2016Dear Friends
Explanation 3 to section 65B(44) says:
"an establishment of a person in the taxable territory and any of his other establishment in a non-taxable terriroty shall be treated as establishments of distinct persons"
Does it mean that if a company in Delhi has a branch in New York and if Delhi company receives any service from New York Branch then service tax will be applicable (recerse charge - import of service)?
Regards
shivani
Anjana Hareendran
(Student CA Final Article )
(54 Points)
Replied 19 March 2016
Dear Shivani ,
You Got it Correct 
CA. Roopali Kadam
(Jobs on assignment basis.)
(1458 Points)
Replied 20 March 2016
service tax will be applicable
(reverse charge - import of service)
yes shivani, thats right
Shivani
(Learner)
(1881 Points)
Replied 22 March 2016
Dear Anjali and Roopali
Thanks for your reply.
But in order to attract service tax there need to be two separate persons.
One cannot render service to himself.
So how come we treat branch as separate entity !
please clear the confusion
Krovi Trinath
(Executive)
(24 Points)
Replied 22 March 2016
Dear Ms. Shivani
In your case Delhi branch is seperate from Head office because it has a seperate Service Tax Registration No. So pay service charges to New York office and pay service tax here because service has been done on taxble terrotory.
CA. Roopali Kadam
(Jobs on assignment basis.)
(1458 Points)
Replied 22 March 2016
One cannot render service to himself
This general rule is derived from sec 65B(44) of Finance Act
Service means any activity for consideration
==Carried out by a person for another
& includes a declared service
Explanation 3 of the same sec 65B(44) gives 2 exceptions to this rule
And you have got one of it very well Shivani
Shivani
(Learner)
(1881 Points)
Replied 22 March 2016
Dear Roopali
The exception you are saying will apply only if the the service receiving branch lies in non-taxable territory and service providing branch lies in taxable territory.
am i right?
if yes, then what about the case where both branches lies in the taxable territory (india exclduing J&K).
regards
CA. Roopali Kadam
(Jobs on assignment basis.)
(1458 Points)
Replied 22 March 2016
1st part
u r talking only imports, other way round will also be considered separate establishments distinct persontoo= exports
2nd part
both branches separate establishments but same assessee(not distict person)
Shivani
(Learner)
(1881 Points)
Replied 23 March 2016
Dear Roopali
No following is the conclusion
1 Brach A (Delhi - Service Receiver) Branch B (New York - Service Provider)
both different persons and service tax applicable to Brach A on reverse charge basis.
2. Brach A (Delhi - Service Provider) Branch B (New York - Service Receiver)
both different persons but no service tax applicable as export of services is exempt.
3. Brach A (Delhi - Service Provider) Branch B (Haryana - Service Receiver)
No service tax as it doesnt qualify to be service as both are same person.
Am i right roopali?
please do confirm.
regards
CA. Roopali Kadam
(Jobs on assignment basis.)
(1458 Points)
Replied 23 March 2016
pt 1 & 3 right
for exports to be exempt https://www.forum.charteredclub.com/threads/service-tax-on-export-of-services.1080/
CA. Roopali Kadam
(Jobs on assignment basis.)
(1458 Points)
Replied 23 March 2016
/articles/reverse-charge-branch--24125.asp
/articles/simplified-approach-to-export-of-services-rules-21307.asp
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