place of provision of service rules
Post on 15-Jul-2015
212 Views
Preview:
TRANSCRIPT
Service Tax : Place of Provision of Services
Presented by:Ca. Jayesh Gogri
PLACE OF PROVISION OF SERVICES
23-01-2015 CA JAYESH GOGRI 2
Place of provision of Services...
• Based on the principle of destination based consumption tax
• An important move towards implementation of GST
• Important to be determined in case of import and exports at present– Imports – Reverse Charge– Exports – Not leviable to Service Tax
• Rules introduced in 2012
• Tries to harmonise with international tax practice to ensure no doubletaxation and no double non-taxation
• Later the better Rule
23-01-2015 CA JAYESH GOGRI 3
Taxable territory
• Only the transactions in taxable territory leviable toService Tax• Taxable territory: India except Jammu & Kashmir• “India”
– not only the land mass– territorial waters– continental shelf– exclusive economic zone or any other maritime zone as defined– the sea-bed and the subsoil underlying the territorial waters– the air space above its territory and territorial waters– the installations structures and vessels located in the continental shelf of India and
the exclusive economic zone of India, for the purposes of prospecting or extractionor production of mineral oil and natural gas and supply thereof
23-01-2015 CA JAYESH GOGRI 4
India (Exclusive Economic Zones)
23-01-2015 CA JAYESH GOGRI 5
PPSR: Rule 3: General/residual rule
23-01-2015 CA JAYESH GOGRI 6
Nature of service In general context
Rule The location of service receiver
Example ‘A’ receives service in Mumbai from ‘B’ ofNew York. The place of provision will beMumbai
PPSR: Rule 4: Performance
23-01-2015 CA JAYESH GOGRI 7
When these services are provided from a remote location by way of electronic means, what will be the place of provision?
Nature of service Services in respect of goods that are required to be made physically available*
Rule Performance based
Example Maintenance, Erectioning etc
* Not applicable for goods temporarily brought in India for repairs (earlier repairs,reconditioning and reengineering)
PPSR: Rule 5: Property based
23-01-2015 CA JAYESH GOGRI 8
Nature of service Services in relation to immovable property
Rule Location of the property
Example Architect, hotel accommodation,Construction etc
PPSR: Rule 6: Event based
23-01-2015 CA JAYESH GOGRI 9
Nature of service Services in relation to events
Rule Place where it is held
Example Exhibition, conference etc.
PPSR: Rule 7: Greatest proportion
23-01-2015 CA JAYESH GOGRI 10
Nature of service Multiple location services
Rule Place where greatest proportion ofservice is provided in the taxable territory
Example ‘A’ has provided management consultancyservice to the extent of 20% in Delhi, 30%in Mumbai and 50% in Bangkok. The Placeof Provision is Mumbai since greatestproportion of service is provided in theMumbai i.e. taxable territory
PPSR: Rule 8: Both located in TT
23-01-2015 CA JAYESH GOGRI 11
Nature of service Service provider and service receiver arelocated in taxable territory
Rule The location of service receiver
Example ‘A’ receives service in Mumbai from ‘B’ ofGoa in relation to a tour in South Africa.The place of provision will be Mumbai.
PPSR: Rule 9: Specified Category
23-01-2015 CA JAYESH GOGRI 12
Nature of service Banking, telecommunication, onlinedatabase, intermediary*, hiring oftransport upto 1 month
Rule Place of service provider
Example ‘A’ from Mumbai provides onlinedatabase services to ‘B’ of Singapore, theplace of provision will the Mumbai
* Intermediary earlier included person who arranged or facilitated provision ofservice but now will also include the persons providing above facilities w.r.t goods
PPSR: Rule 10: Goods Transportation
23-01-2015 CA JAYESH GOGRI 13
Nature of service 1.Goods transportation(not covering mailor courier)2.the place of provision of services inrelation to goods transportation agency
Rule 1.Place of destination2.The location of the person liable to paytax
Example •If ‘A’ of Mumbai transports goods to ‘B’of Goa, the place of provision will be Goa.•If A of Mumbai transports goods to B ofKathmandu, the place of provision will beMumbai.
PPSR: Rule 11:Transportation of passengers
23-01-2015 CA JAYESH GOGRI 14
Nature of service Passenger transportation services
Rule Place where the passenger embarks
Example ‘A’ from Mumbai travels to Goa by bus.The place of provision is Mumbai.
PPSR: Rule 12: Services on board
23-01-2015 CA JAYESH GOGRI 15
Nature of service Services on board a conveyance
Rule Place which is the first scheduled point ofdeparture of that conveyance for thejourney
Example ‘A’ from Mumbai travels to Goa by a flightand during the journey, he buys foodstuff. The place of provision is Mumbai
Rule 6A of STR – Export of Services
Conditions for considering a service as Export(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 the 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 ofservice in convertible foreign exchange, and(f) the provider of service and recipient of service are not merelyestablishments of a distinct person in accordance with item (b) ofExplanation 3 of clause (44) of section 65B of the Act.
23-01-2015 CA JAYESH GOGRI 16
Case Study
• If Services are provided from outside India as per PPOS Rules
• Payment is received in INR
• Will it be considered as Export?– Rule 6A – Convertible Foreign Exchange
• If not considered as ‘Export of services’ then Liable to Service Tax???
23-01-2015 CA JAYESH GOGRI 17
Ca. Jayesh GogriDirector
2/22 Nityanand Nagar, Sahar Road, Andheri (East),Mumbai-400 069.
6-A, Ranjit Studio Compound, DSP Road, Dadar (East),Mumbai-400 014.
+91 22 2684 0208+91 9821 012 151+91 9870 712 151
info@gscintime.comjayeshgogri@gscintime.com
Right advice at right time…
23-01-2015 CA JAYESH GOGRI 18
top related