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-Ch.Kapil-Article Assistant at Gella & Co
PLACE OF Provision of service Rules - 2012
Contents1. Simulated Examples
2. Introduction to Place of Provision (POP)
Rules
3. Definitions
4. Place of Provision of Rules
5. Accounting and Auditors Point of View2 [email protected]
If DSP Performs
musical event in
Bangalore and live
telecast viewed online
by paying Rs.10,000 /-
The Great Scientist of India
giving coaching and training
to the technicians who are
working in NASA.
4
Sharuk Khan has arranged his
Birth Day Party in Ship which
moved from Say Vizag (1 Day)
to Mumbai (2 Days) and then
to London (3 Days). Then
where the place of provision
considered as Vizag or
Mumbai or London. (Days is
No.of Days of Party)
Introduction of Place of Provision of
Service Rules
Service not covered in -Negative list or Mega
Exemption Notification Taxable Service Service
Tax to be paid (Taxable Territory) /not to be paid
(Outside Taxable Territory)
Also called as “ Export of Service” in general
terminology
Rule 6A of Service Tax Rules 1994 i.e Conditions
for determining the Export of Service has to satisfy
the conditions as below:
a. The provider of service is located in the taxable
territory,
(b) The recipient of the service is located outside
India,
(c) The service is not a service specified in the
(d) The place of provision of the service is outside India,
(e) The payment for such services 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 Explanation 3 of clause (44) of section 65B
of the Act.
Interpretation of POP Rules
POP Rules to be applied starting from Bottom i.e Rule 12
to top i.e. Rule 3 for exact confirmation of Place of
Provision as per Rule 14
Introduction of Place of Provision of
Service Rules Contd….
Definitions :
1. Service
Section 65 B (44) of Chapter V of Finance Act,1994
defines service as “ Means any activity carried out for
consideration and a Declared Service but does not
include the following :
1. An activity which constitute merely
a. Transfer of title of goods by way of sale or gift or any
other manner
b. movement of goods which has the meaning of sale
according to clause(29a)of article 366 of constitution
c. a transaction in money or actionable claim
2. A provision of service in course of employment
3. Fees taken in any court or tribunal established under
any law for the time being in force7
2. Taxable Territory – India
The territory of the union as referred to in clauses (2) and (3)
of article 1 of Indian Constitution
Its territorial waters, continental shelf, exclusive economic
zone or any other maritime zone as defined in the territorial
waters, continental shelf, exclusive economic zones and other
maritime zones act,1976
The seabed and the subsoil underlying the territorial waters
The air space above its territory and territorial waters and
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 extraction or
production of mineral oil and natural gas and supply thereof
8
Service Nature Place of
Provision
Rule No Considerations
Board a
conveyance
First
Scheduled
Point
Rule 12
Passenger
Transportatio
n Service
Place of
embarking by
Passenger –
Continuous
Journey
Rule 11 Only
continuous
Journey
GTA Destination of
Goods
Rule 10 Only other
than Mail or
courier .
Summarized Place of Provision Rules -2012
9
Rule 9.
For The below services the Place of Provision of service is Location of Service Provider
1. Services provided by a banking company, or a financial institution, or a non-banking financial company to account holders2. Online information and database access or retrieval services3. Intermediary services4. Service consisting of hiring of all means of transport other than(i) Aircrafts and(ii) vessels except yachts - upto a period of one month
Summarized Place of Provision Rules -2012 Contd..
Service Nature Place of
Provision
Rule No Considerations
Recipient and
Provider
located in
India
Location of
Recipient of
Service
Rule 8 That means
only
transactions
within India
Service
Provided > 1
Location
Highest
Percentage
of Provision
Rule 7 Only for
service
referred in
Rules 4,5,6
Service
Relating to
Events
Place of
Event
actually held
Rule 6
Summarized Place of Provision Rules -2012 Contd..
11
Service
Nature
Place of
Provision
Rule No Consideratio
ns
Service
Relating to
Immovable
Property
Location of
Immovable
Property
Rule 5 It includes
leasing and
rental basis
Performance
Based
Services
Location
where service
actually
Performed
Rule 4 Service can
be performed
online or by
having goods
in physical
Summarized Place of Provision Rules -2012 Contd..
Application of rules to the Simulated Examples
Rule 11 & 12:
The services in relation to transportation of Passenger
are covered in Rule 11 i.e travel agency or in relation
thereof. Where as other services at the time of journey
are covered in Rule 12 like serving of food, entertainment
etc.
Rule 6 :
Now as referred in my examples Sharukh Party and
DSP musical event are covered here as it covers
cultural, artistic, sporting, scientific, educational, or
entertainment event, or a celebration, conference, fair,
exhibition, or similar events, and of services ancillary to
such admission
13
Rule 3 :
Place of
Provision
is Location
of
Recipient
of service
Application of rules to the Simulated Examples Contd…
Rule 4 :
The online coaching given by Mr. APJ Abdul Kalam will
be
covered in this rule as recipient NASA or person acting
on its behalf of NASA and Mr. APJ Abdul Kalam are
present in one place. The place of provision of service
would be US.
Rule 3 :
It is a general provision. It is to
be applied if all the rules from
Rule 12 to Rule 4 are not
applicable do not cover.
Auditor’s Point
of View :
He has check
the nature of
transaction and
validate the
Place of
provision and
help his client if
any wrong
considerations
availed or
recognised
Accounting Point of View :
He has confirm that the
service tax paid by him is on
the services provided in the
Taxable Territory and with
appropriate tax Rates
