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PLACE OF PROVISION OF SERVICES RULES Enabling Service Tax Practice
Hyderabad Branch of SIRC of ICAIOctober 27, 2012
Preamble Follows that the essence of levy of service is consumption
– destination based consumption tax Provides for:
Identification of jurisdiction / situs for payment of service tax;
Determination of the location of service provider or receiver;
Relevant for determining the levy of service tax and grant of concessions / exemptions
Rules Notified Place of Provision of Service, 2012
Notification No. 28/2012 dated 20.06.2012 With effect from 01.07.2012
Export of Service Rules, 2005 Taxation of Services (Provided from outside India and
Received in India) Rules, 2006 RESCINDED
New Provisions Export of services – as per Rule 6A of the Service Tax
Rules Notifn No. 36/2012 dated 20.06.2012
Person liable to pay service tax Services received from persons located in the non-
taxable territory and received by persons located in the taxable territory – the recipient of such service
Notifn No. 36/2012 dated 20.06.2012
Export of Services
Upto 30.06.2012 Based on classification of
services – 3 categories Payment is received in
convertible forex
WEF 01.07.2012 Provider of services is located in
taxable territory Receiver of service is located
outside India Service is not a service listed under
Section 66D Place of provision of service is
outside India Payment is received in convertible
forex Provider and receiver are not
merely establishments as required for reverse charge
Import of Services
Upto 30.06.2012 Based on classification of
services – 3 categories Provided from any person
outside India and received by any person in India
WEF 01.07.2012 Provided by any person located in a
non-taxable territory Received by any person located in
the taxable territory
Important Expressions Location of the service provider Location of the service receiver
Location of SERVICE PROVIDER Where SP has obtained a single registration (centralised or
otherwise) The premises for which registration is sought
Other SPs Location of his business establishment If services provided from a place other than the business
establishment – the location of fixed establishment If provided from more than 1 establishments – the
establishment most directly concerned In absence of the above – usual place of residence
Location of SERVICE RECEIVER Where SR has obtained a single registration (centralised or
otherwise) The premises for which registration is sought
Other SRs Location of his business establishment If services received at a place other than the business
establishment – the location of such fixed establishment If received at more than 1 establishments – the
establishment most directly concerned In absence of the above – usual place of residence
Rules – what is “place of provision”3. Generally, Place of Recipient of Services 4. Performance Based Services 5. Services Relating to Immovable Properties 6. Services Relating to Events 7. Services Provided at more than one Location 8. Where Provider and Recipient are located in the Taxable
Territory 9. Specified Services 10. Goods Transportation Services 11. Passenger Transportation Services 12. Services Provided onboard a conveyance
Place of Recipient of Services GENERALLY, the place of recipient of services shall be the
place of provision of services If such place is not available in the normal course of
business, it shall be the location of the provider
Performance Based Services Place of provision shall be the place where such services are actually performed In respect of goods that are required to be made
physically available by the recipient Where such goods are provided thru a remote location
– shall be where the goods are located Not applicable in respect of goods imported
temporarily for repairs…. Yet to be prescribed Services provided to an individual which requires physical
presence of the receiver
Services - Immovable PropertiesPlace where the immovable property is located / intended to be located Services provided directly in relation to immovable
property Including services of experts, estate agents, hotel
accommodation, rights to use immovable property, coordination of construction work, architects, interior decorators
Services Relating to EventsPlace where the event is held Services provided by way of admission to or organisation
of cultural, artistic, sporting, scientific, educational or entertainment event or a celebration, conference, fair, exhibition or similar events
Including ancillary services
From more than 1 location The location where the greatest proportion of the
services is provided Applicable only for ‘performance based services’, ‘immovable
property related services’ and ‘events’
Provider and Recipient Located in Taxable Territory
Shall be the location of the recipient of service
Specified ServicesShall be the location of the service provider Services provided by banking company or financial
institution or NBFC to account holders Online information and database access or retrieval
services Intermediary services Hiring of any means of transport (upto 1 month)
Goods Transportation Shall be the destination of goods For transportation of goods other than by way of courier
or mail For GTAs – the location of the person liable to pay tax
Passenger Transportation Where the passenger embarks on the conveyance for a
continuous journey
Services - Onboard Conveyance Services provided onboard the conveyance during the
course of passenger transport operation - the place of first scheduled point of departure
Issues !!!1. Situs for payment of service tax – destination based
Should providers register and remit tax at the destination?
2. Passive receiver of services 3. Bundled services – classification vs. situs 4. Services USED at a place other than the business
establishment 5. Passenger embarking in a non-taxable territory7. Establishments of the same person are treated as
different – only for reverse charge Not for export of services !!
