CA J.Jayaprakash (Senior Officer (Finance)) (273 Points)
02 February 2015Dear Friends,
One of our client is providing technical consultancy services to a company situated in Hong Kong. He had stayed there and provided the services. Kindly guide me through the Service Tax provisions applicable to him.
Aditya RVS
(Practice)
(221 Points)
Replied 02 February 2015
Consider the facts - Service provider, i.e., your client, who is located in taxable territory (India) has provided service to a service receiver (Company situated outside Taxable territory, i.e., Hongkong). As per the facts, the service (Technical Consultancy service - Not a service specified in the Negative list, which does not fall under specific clauses of Place of provision of services (POPS) Rules, 2012) is provided at Hongkong.
Hence, as per Rule 3 of POPS rules, place of provision of the service is outside the taxable territory.
Considering the same, if the payment for such service is received by your client in convertible foreign exchange, then all conditions of Rule 6A of Service Tax Rules, (Enclosed below) are said to be satisfied and the service can be termed as Export of service.
Please revert in case of any clarification.
Export of services.
6A . (1) The provision of any service provided or agreed to be provided shall be treated as export of service when,—
| (a) | the provider of service is located in the taxable territory, | |
| (b) | the recipient of service is located outside India, | |
| (c) | the service is not a service specified in section 66D of the Act, | |
| (d) | the place of provision of the service is outside India, | |
| (e) | the payment for such service has been received by the provider of service in convertible foreign exchange, and | |
| (f) | the provider of service and recipient of service are not merely establishments of a distinct person in accordance with item (b) of 92bExplanation 3 of clause (44) of section 65B of the Act. |
(2) Where any service is exported, the Central Government may, by notification, grant rebate of service tax or duty paid on input services or inputs, as the case may be, used in providing such service and the rebate shall be allowed subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification.]
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