Clarification on Point of Taxation Rules

Circular No. 162/13 /2012 –ST,  F. No. 354/111/2012-TRU dated 6^th July 2012.

To

Chief Commissioner of Customs and Central Excise (All)

Chief Commissioner of Central Excise & Service Tax (All)

Director General of Service Tax

Director General of Central Excise Intelligence

Director General of Audit

Commissioner of Customs and Central Excise (All)

Commissioner of Central Excise and Service Tax (All)

Commissioner of Service Tax (All)

Consequent to the changes introduced at the time of Budget 2012 in the Point of Taxation Rules, 2011, together with revision of the service tax rate from 10% to 12% and the subsequent changes that have been made effective from 01.07.2012, the following clarifications have been desired:

(a) Point of taxation and the rate applicable in respect of continuous supply of services at the time of change in rates effective from 01.04.2012;

(b) Applicability of the revised  rule 2A of the Service Tax (Determination of Value) Rules, 2006 to ongoing works contracts for determination of value when the value was being determined under the erstwhile Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007; and

(c) Applicability of partial reverse charge provisions in respect of specified services.

2.1. The issues have been examined.  The continuous supply of services was governed by rule 6 until 31.03.2012.  The rule started with the wordings “notwithstanding anything contained in rules 3, 4 …” Therefore, the point of taxation in respect of services provided in terms of the said rule on or before 31.03.2012 would remain unaffected by rule 4.

2.2. To clarify the matter further, if the invoice had been issued or payment received in respect of such services on or before 31.03.2012, the point of taxation would stand determined under rule 6 accordingly and shall not alter due to the subsequent changes in the Point of Taxation Rules, 2011 that became effective only from 1.4.2012.

3.1. However the position has undergone a change at the time of transition towards the Negative List and the introduction of other accompanying changes in Service Tax (Determination of Value) Rules, 2006 and partial reverse charge.  At the said time rule 6 stood omitted and the point of taxation was required to be determined ordinarily in such cases under the main rule i.e. rule 3.   This rule is, however, overridden by rule 4 when there is a change in effective rate of tax.  The “change in effective rate of tax” has been defined in clause (ba) of rule 2 to include a change in the portion of value on which tax is payable.

3.2. To illustrate, the following would be changes in effective rate of tax:-

(i) the change in the portion of total value liable to tax in respect of works contract other than original works (from @ 4.8% earlier to @ 12% on 60% of the total amount charged, or effectively @ 7.2% now).

(ii) exemption granted to certain works contracts w.e.f. 1^st July 2012 which were earlier taxable.

(iii) taxability of certain works contracts which were hitherto exempted.

(iv) change in the manner of payment of tax from composition scheme under the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 to payment on actual value under clause (i) of rule 2A of the Service Tax (Determination of Value) Rules, 2006.

3.3. However, the following will not be a change in effective rate of tax:-

(i) works contracts earlier paying service tax @ 4.8% under Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 and now required to pay service tax @12% on 40% of the total amount charged, keeping the effective rate again at 4.8% (as only the manner of expression has been altered).

(ii) works contracts which were outside the scope of taxation (and not merely exempted) but have become now taxable e.g. construction of residential complex comprising of  2 to 12 residential units,  construction of buildings meant for use by NGOs etc. (Rule 5 of the Point of Taxation Rules, 2011 shall apply to such services.)

3.4. Thus the point of taxation for services provided in respect of taxable works contracts in progress on 01.07.2012 would need to be determined under rule 4 of the Point of Taxation Rules unless there is no change in effective rate of tax.

4. It is further clarified that the provisions of partial reverse charge would also be applicable in respect of such services where point of taxation is on or after 01.07.2012 under the applicable rule in respect of the service provider.

5.  This Circular may be communicated to the field formations and service tax assessees, through Public Notice/ Trade Notice. Hindi version to follow.

Click here to view the complete text of the above Circular- Circular No. 162/13 /2012 –ST dated 6^th July 2012.

Source: Directorate of Service Tax.

Income-tax (Seventh Amendment) Rules, 2012

Income-tax (Seventh Amendment) Rules, 2012 – Amendment in Rule 12 and Substitution of Forms ITR-5 and ITR-6

Notification No.25/2012 [F.No.142/31/2011 -TPL]/S.O. 1453(E), dated 02.07.2012.

In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. (1) These rules may be called the Income-tax (7th Amendment) Rules, 2012.

    (2) They shall come into force from the date of its publication in the Official Gazette.

2. In the Income-tax Rules, 1962,-

(A) in rule 12,–

(i) in sub-rule (1),-

(a) in the proviso to clause (a), for the words “being an individual, who is a resident,” the following words, brackets and figures shall be substituted, namely:-

“who is a resident, other than not ordinarily resident in India within the meaning of sub-section (6) of section 6”;

(b) in the proviso to clause (ca), for the words “being an individual or Hindu undivided family, who is a resident,” the following words, brackets and figures shall be substituted, namely:-

“who is a resident, other than not ordinarily resident in India within the meaning of sub-section (6) of section 6”;

(ii) in sub-rule (3), in the proviso, in clause (aa) after the words “being a resident,” the words, brackets and figures “other than not ordinarily resident in India within the meaning of sub-section (6) of section 6” shall be inserted;

(B) in Appendix-II,

(i) for Forms ITR-5, the following shall be substituted, namely:-

(ii) for Form ITR-6, the following shall be substituted, namely:-

“Forms ITR-5 and ITR-6 have been separately attached”

Source: Income Tax Department- India.

Point of Taxation (Amendment) Rules, 2012

Notification No. 37/2012 – Service Tax dated 20^th June, 2012

[F. No.334/1/2012 -TRU]

G.S.R. ….(E).- In exercise of the powers conferred by clause (a) and clause (hhh) of sub- section (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the Point of Taxation Rules, 2011, namely:—

1. (a) These rules may be called the Point of Taxation (Amendment) Rules, 2012.

(b) They shall come into force on the 1^st day of July, 2012.

2. In the Point of Taxation Rules, 2011,-

(a)  in rule 2, sub-rules (b) and (f) shall be omitted.

(b) for the words, “provided or to be provided” wherever they occur, the words “provided or agreed to be provided” shall be substituted.

(Rajkumar Digvijay)

Under Secretary to the Government of India

Note: The principal notification was published in the Gazette of India, Extraordinary, vide notification No. 18/2011 – Service Tax, dated 1-3-2011 vide number G.S.R. 175 (E), dated the 1^st March, 2011 and was last amended by notification No. 4/2012-Service Tax, dated the 17^th March, 2012[G.S.R.202 (E), dated the 17^th March, 2012].

Source: Directorate of Service Tax.

Service Tax (Second Amendment) Rules, 2012

Notification No.  36/2012- Service Tax dated 20^th June , 2012

[F.No. 334 /01/2012- TRU]

G.S.R. (E)- In exercise of the powers conferred by sub-section (1) read with sub-section (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the Service Tax Rules, 1994, namely:—

1. (1) These rules may be called the Service Tax (Second Amendment) Rules, 2012.

(2) They shall come into force on the 1^st day of July, 2012.

2. In the Service Tax Rules, 1994 (hereinafter referred to as the principal rules), in rule 2,-

(i) after sub-clause (b), the following three sub-clauses shall be inserted, namely:—

“(bb) “banking company” has the meaning assigned to it in clause (a) of section 45A of the Reserve Bank of India Act, 1934 (2 of 1934);

(bc) “body corporate” has the meaning assigned to it in clause (7) of section 2 of the Companies Act, 1956 (1 of 1956);

(bd) “financial institution” has the meaning assigned to it in clause (c) of section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934);”

(ii) after sub-clause (c), the following sub-clause shall be inserted, namely:—

“(c1a) “goods carriage” has the meaning assigned to it in clause (14) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988);”

(iii) after sub-clause (cb), the following sub-clause shall be inserted, namely:—

“(cba) “insurance agent” has the meaning assigned to it in clause (10) of section 2 of the Insurance Act, 1938 (4 of 1938);”

(iv) after sub-clause (cc), the following sub-clauses shall be inserted,   namely:—

‘(cca)“legal service”  means any service provided in relation to advice, consultancy or assistance in any branch of law, in any manner and includes representational services before any court, tribunal or authority;

(ccb) “life insurance business” has the meaning assigned to it in clause (11) of section 2 of the Insurance Act, 1938 (4 of 1938);

(ccc) “non banking financial company” has the meaning assigned to it in clause (f) of section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934);’

(v) for sub-clause (d), the following shall be substituted, namely:-

  “(d) “person liable for paying service tax”, –

(i)     in respect of the taxable services notified under sub-section (2) of section 68 of the Act, means,-

(A)   in relation to service provided or agreed to be provided  by an insurance agent to any person carrying on the insurance business, the recipient of the service.

(B)   in relation to service provided or agreed to be provided   by a goods transport agency in respect of  transportation  of goods by road, where  the person liable to pay freight is,—

(I) any factory registered under or governed by the Factories Act, 1948 (63 of 1948);

(II) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India;

(III) any co-operative society established by or under any law;

(IV) any dealer of excisable goods, who is registered under the Central Excise  Act, 1944 (1 of 1944) or the rules made thereunder;

(V) any body corporate established, by or under any law; or

(VI) any partnership firm whether registered or not under any law including association of persons; any person who pays or is liable to pay freight either himself or through his agent for the transportation of such goods by road in a goods carriage:

Provided that when such person is located in a non-taxable territory, the provider of such service shall be liable to pay service tax.

(C)    in relation to service provided or agreed to be provided by way of sponsorship to anybody corporate or partnership firm located in the taxable territory, the recipient of such service;

(D)    in relation to service provided or agreed to be provided by,-

(I) an arbitral tribunal, or

(II) an individual advocate or a firm of advocates by way of legal services,   to any business entity located in the taxable territory, the recipient of such service;

(E)    in relation to support services provided or agreed to be provided by Government or local authority except,-

(a)    renting of immovable property, and

(b)   services specified sub-clauses (i), (ii) and (iii) of clause (a) of section 66D of the Finance Act,1994,

 to any business entity located in the taxable territory, the recipient of such service;

(F)     in relation to services provided or agreed to be provided by way of :-

(a)      renting of a motor vehicle designed to carry passengers, to any person who is not engaged in a similar business; or

(b)   supply of manpower for any purpose; or

(c)    service portion in execution of a works contract-

by any individual, Hindu Undivided Family or partnership firm, whether registered or not, including association of persons, located in the taxable territory to  a business entity registered as a body corporate, located in the taxable territory,  both the service provider  and the service recipient  to the extent notified under sub-section (2) of section 68 of the Act, for each respectively.

(G)    in relation to any taxable service provided or agreed to be provided by any person which is located in a non-taxable territory and received by any person located in the taxable territory,  the recipient of such service;

(ii)   in a case other than sub-clause (i), means the provider of service.”

(vi) after sub-clause (d), the following sub-clause shall be inserted, namely:—

 ‘(dd) “place of provision” shall be the place as determined by Place of Provision    of Services Rules 2012;’

(vii) after sub-clause (e), the following sub-clauses shall be inserted, namely:—

‘(f) “renting of immovable property” means any service provided or agreed to be provided by renting of immovable property or any other service in relation to such renting.

(g) “supply of manpower” means supply of manpower, temporarily or otherwise, to another person to work under his superintendence or control.’

3. In the principal rules, in rule 4, in sub-rule (1), for the word and figures “section 66”, the word, figures and  letter “section 66B”shall be substituted;

4. In the principal rules, in rule 4A,-

            (A)       in sub-rule (1),-

(i) for the words “provided or to be provided”, the words “provided or agreed to be provided” shall be substituted;

(ii) for clause (iii), the following shall be substituted, namely:-

“(iii) description and value of taxable service provided or agreed to be provided; and”,

(iii) for the first proviso, the following proviso shall be substituted, namely:-

             “Provided that in case the provider of taxable service is a banking company or a financial institution including a non-banking financial company providing service to any person, an invoice, a bill or, as the case may be, challan shall include any document, by whatever name called, whether or not serially numbered, and whether or not containing address of the person receiving taxable service but containing other information in such documents as required under this sub-rule :”;

(iv) for the fourth proviso, the following proviso shall be substituted, namely:-

   “Provided also that in case the provider of taxable service is a banking company or a financial institution including a non-banking financial company providing service to any person, the period within which the invoice, bill or challan, as the case may be, is to be issued, shall be forty-five days:” ;

(v) for the fifth proviso, the following proviso shall be substituted, namely:-

“Provided that in case the provider of taxable service is providing the service of transport of passenger, an invoice, a bill or as the case may be, challan shall include ticket in any form by whatever name called and whether or not containing registration number of the provider of service and address of the recipient of service but containing other information in such documents as required under this sub-rule”;

(B) in sub-rule (2), for the first proviso, the following proviso shall be substituted, namely:-

           “Provided that in case the input service distributor is an office of a banking company or a financial institution including a non-banking financial company providing service to any person an invoice, a bill or, as the case may be, challan shall include any document, by whatever name called, whether or not serially numbered but containing other information in such documents as required under this sub-rule:”;

5. In the principal rules, in rule 5, in sub-rule (2), in clause (i), for sub-clause (a), the following shall be substituted, namely:-

“(a) providing of any service;”

6. In the principal rules, rule 5B, shall be omitted;

7. In the principal rules, in rule 6,-

(1) in sub-rule (1),-

(i) the third proviso shall be omitted;

(ii) after the third proviso as so amended, in the fourth  proviso, for the words “provided or to be provided”, the words “provided or agreed to be provided” shall be substituted;

(2) in sub-rule (4B), the word “classification,” shall be omitted;

(3) for sub-rule (4C), the following shall be substituted, namely:­­-

“(4C) Notwithstanding anything contained in sub-rules (4), (4A) and (4B), where the person liable to pay service tax in respect of service of renting of immovable property has paid to the credit of Central Government any amount in excess of the amount required to be paid towards service tax liability for a month or quarter, as the case may be, on account of non-availment of deduction of property tax paid in terms of notification No. 29/2012-Service Tax , dated the 20^th June, 2012, from the gross amount charged for renting of the immovable property for the said period at the time of payment of service tax, the assessee may adjust such excess amount paid by him against his service tax liability within one year from the date of payment of such property tax and the details of such adjustment shall be intimated to the Superintendent of Central Excise having jurisdiction over the service provider within a period of fifteen days from the date of such adjustment.”;

(4) in sub-rule (7),-

(a) after the words “to the services”, the words “of booking of tickets for travel by air” shall be inserted;

(b) for the word and figures “section 66”, the word, figures  and letter “section 66B” shall be substituted;

(5) in sub rule (7A), for the word and figures “section 66”, the word, figures  and letter “section 66B” shall be substituted;

(6)     in sub-rule (7B), for the portion beginning with the brackets, figure, letter and words, “(7B) The person liable to pay” and ending with the words and figures “Chapter V of the Act, namely :”, the following shall be substituted, namely:-

“(7B) The person liable to pay service tax in relation to purchase or sale of foreign currency, including money changing, shall have the option to pay an amount calculated at the following rate towards discharge of his service tax liability instead of paying service tax at the rate specified in section 66B of Chapter V of the Act, namely :”

(7)     in the sub-rule (7C),-

(i) for the for the portion beginning with the brackets, figure, letter and words,  “(7C) The distributor” and ending with the words, figures and letters “section 66 of Chapter V of the said Act:”, the following shall be substituted, namely:-

 “(7C) The distributor or selling agent, liable to pay service tax for the taxable service of promotion, marketing, organising or in any other manner assisting in organising lottery, shall have the option to pay an amount at the rate specified in column (2) of the Table given below, subject to the conditions specified in the corresponding entry in column (3) of the said Table, instead of paying service tax at the rate specified in section 66B of Chapter V of the said Act :”

(ii) in the third proviso, for the words “service under the said sub-clause”, the words “such service” shall be substituted;

8. In the principal rules, after rule 6, the following rule shall be inserted, namely:—

“RULE 6A. Export of services.- (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 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 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 2 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.”

(Raj Kumar Digvijay)

Under Secretary to the Government of India

Note.- The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide notification No. 2/94-ST, dated the 28^th June, 1994 vide number G.S.R. 546(E), dated the 28^th June, 1994 and was last amended by notification No. 3/2012-Service Tax, dated the 17^th March, 2012 vide number G.S.R. 201 (E), dated the 17^th March, 2012.

Source: Directorate of Service Tax.

Place of Provision of Services Rules, 2012

Notification No. 28/2012 – Service Tax dated 20^th June, 2012

[F.No. 334 /1/ 2012-TRU]

G.S.R…..(E).- In exercise of the powers conferred by sub-section (1) of section 66C and clause (hhh) of sub-section (2) of section 94 of the Finance Act, 1994 and in supersession of the notification of the Government of India in the Ministry of Finance, Department of Revenue, number 9/2005-ST, dated the 3^rd March, 2005 published in the Gazette of India Extraordinary, Part II, Section 3, Sub-Section (i) vide number G.S.R. 151 (E) dated the 3^rd March, 2005 and the notification of the Government of India in the Ministry of Finance, Department of Revenue, number 11/2006-ST dated the 19^th May, 2006 published in the Gazette of India Extraordinary, Part II, Section 3, Sub-Section (i) vide number G.S.R. 227 (E) dated the 19^th May, 2006, except as respects things done or omitted to be done before such supersession, the Central Government hereby makes the following rules for the purpose of determination of the place of provision of services, namely:-

1. Short title, extent and commencement. –

(1) These rules may be called the Place of Provision of Services Rules, 2012.

(2)  They shall come into force on 1^st day of July, 2012.

2. Definitions.-

In these rules, unless the context otherwise requires,-

(a) “Act” means the Finance Act, 1994 (32 of 1994);

(b) “account” means an account bearing interest to the depositor, and includes a non-resident external account and a non-resident ordinary account;

(c) “banking company” has the meaning assigned to it in clause (a) of section 45A of the Reserve Bank of India Act, 1934 (2 of 1934);

(d) “continuous journey” means a journey for which a single or more than one ticket or invoice is issued at the same time, either by one service provider or through one agent acting on behalf of more than one service provider, and which involves no stopover between any of the legs of the journey for which one or more separate tickets or invoices are issued;

(e) “financial institution” has the meaning assigned to it in clause (c) of section 45-I of the Reserve Bank of India Act,1934 (2 of 1934);

(f) “intermediary” means a broker, an agent  or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the ‘main’ service) between two or more persons, but does not include a person who provides the main service on his account.;

(g) “leg of journey” means a part of the journey that begins where passengers embark or disembark the conveyance, or where it is stopped to allow for its servicing or refueling, and ends where it is next stopped for any of those purposes;

(h) “location of the service provider” means-

(a). where the service provider has obtained a single registration, whether centralized or otherwise, the premises for which such registration has been obtained;

(b). where the service provider is not covered under sub-clause (a):

(i) the location of his business establishment; or

(ii) where the services are provided from a place other than the business establishment, that is to say, a fixed establishment elsewhere, the location of such establishment; or

(iii) where services are provided from more than one establishment, whether business or fixed, the establishment most directly concerned with the provision of the service; and

(iv) in the absence of such places, the usual place of residence of the service provider.

(i) “location of the service receiver” means:-

(a). where the recipient of service has obtained a single registration, whether centralized or otherwise, the premises for which such registration has been obtained;

 (b). where the recipient of service is not covered under sub-clause (a):

(i) the location of his business establishment; or

(ii) where services are used at a place other than the business establishment, that is to say, a fixed establishment elsewhere, the location of such establishment; or

(iii) where services are used at more than one establishment, whether business or fixed, the establishment most directly concerned with the use of the service; and

(iv) in the absence of such places, the usual place of residence of the recipient of service.

Explanation:-. For the purposes of clauses (h) and (i), “usual place of residence” in case of a body corporate means the place where it is incorporated or otherwise legally constituted.

Explanation 2:-. For the purpose of clause (i), in the case of telecommunication service, the usual place of residence shall be the billing address.

(j) “means of transport” means any conveyance designed to transport goods or persons from one place to another;

(k) “non-banking financial company” means-

(i) a financial institution which is a company; or

(ii) a non-banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; or

(iii) such other non-banking institution or class of such institutions, as the Reserve Bank of India may, with the previous approval of the Central Government and by notification in the Official Gazette specify;

(l) “online information and database access or retrieval services” means providing data or information, retrievable or otherwise, to any person, in electronic form through a computer network;

(m) “person liable to pay tax”  shall mean the person liable to pay service tax under section 68 of the Act or under sub-clause (d) of sub-rule (1) of rule 2 of the Service Tax Rules, 1994;

(n) “provided” includes the expression “to be provided”;

(o) “received” includes the expression “to be received”;

(p) “registration” means the registration under rule 4 of the Service Tax Rules, 1994;

(q) “telecommunication service” means service of any description (including electronic mail, voice mail, data services, audio text services, video text services, radio paging and cellular mobile telephone services) which is made available to users by means of any transmission or reception of signs, signals, writing, images and sounds or intelligence of any nature, by wire, radio, visual or other electro-magnetic means but shall not include broadcasting services.

 (r) words and expressions used in these rules and not defined, but defined in the Act, shall have the meanings respectively assigned to them in the Act.

3. Place of provision generally.-

The place of provision of a service shall be the location of the recipient of service:

Provided that in case the location of the service receiver is not available in the ordinary course of business, the place of provision shall be the location of the provider of service.

4. Place of provision of performance based services.-

The place of provision of following services shall be the location where the services are actually performed, namely:-

(a)  services provided in respect of goods that are required to be made physically available by the recipient of service to the provider of service, or to a person acting on behalf of the provider of service, in order to provide the service:

Provided that when such services are provided from a remote location by way of electronic means the place of provision shall be the location where goods are situated at the time of provision of service:

Provided further that this sub-rule shall not apply in the case of a service provided in respect of goods that are temporarily imported into India for repairs, reconditioning or reengineering for re-export, subject to conditions as may be specified in this regard.

(b)services provided to an individual, represented either as the recipient of service or a person acting on behalf of the recipient, which require the physical presence of the receiver or the person acting on behalf of the receiver, with the provider for the provision of the service.

5. Place of provision of services relating to immovable property.-

The place of provision of services provided directly in relation to an immovable property, including services provided in this regard by experts and estate agents, provision of hotel accommodation by a hotel, inn, guest house, club or campsite, by whatever, name called, grant of rights to use immovable property, services for carrying out or co-ordination of construction work, including architects or interior decorators, shall be the place where the immovable property is located or intended to be located.

6. Place of provision of services relating to events.-

The place of provision of services provided by way of admission to, or organization of, a cultural, artistic, sporting, scientific, educational, or entertainment event, or a celebration, conference, fair, exhibition, or similar events, and of services ancillary to such admission, shall be the place where the event is actually held.

7. Place of provision of services provided at more than one location.-

Where any service referred to in rules 4, 5, or 6 is provided at more than one location, including a location in the taxable territory, its place of provision shall be the location in the taxable territory where the greatest proportion of the service is provided.

8. Place of provision of services where provider and recipient are located in taxable territory.-

Place of provision of a service, where the location of the provider of service as well as that of the recipient of service is in the taxable territory, shall be the location of the recipient of service.

9. Place of provision of specified services.-

The place of provision of following services shall be the location of the service provider:-

(a)     Services provided by a banking company, or a financial institution, or a non-banking financial company, to account holders;

(b)    Online information and database access or retrieval services;

(c)     Intermediary services;

(d)    Service consisting of hiring of means of transport, upto a period of one month.

10. Place of provision of goods transportation services.-

The place of provision of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of the goods:

Provided that the place of provision of services of goods transportation agency shall be the location of the person liable to pay tax.

11. Place of provision of passenger transportation service.-

The place of provision in respect of a passenger transportation service shall be the place where the passenger embarks on the conveyance for a continuous journey.

12. Place of provision of services provided on board a conveyance.-

Place of provision of services provided on board a conveyance during the course of a passenger transport operation, including services intended to be wholly or substantially consumed while on board, shall be the first scheduled point of departure of that conveyance for the journey.

13. Powers to notify description of services or circumstances for certain purposes.-

In order to prevent double taxation or non-taxation of the provision of a service, or for the uniform application of rules, the Central Government shall have the power to notify any description of service or circumstances in which the place of provision shall be the place of effective use and enjoyment of a service.

14. Order of application of rules.-

Notwithstanding anything stated in any rule, where the provision of a service is, prima facie, determinable in terms of more than one rule, it shall be determined in accordance with the rule that occurs later among the rules that merit equal consideration.

(Rajkumar Digvijay)

Under Secretary to the Government of India

Source: Directorate of Service Tax.