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SERVICE TAX RULES - Taxation of Services (Provided from Outside India and Received in India) Rules, 2006
January, 28th 2011

Taxation of Services (Provided from Outside India and Received in India) Rules, 2006.

 

In exercise of the powers conferred by sections 93 and 94, read with section 66A of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules, namely:-

1. Short title and commencement.

(1) These rules may be called the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006.
(2) They shall come into force on the date of their publication in the Official Gazette.

 

2. Definitions. In these rules, unless the context otherwise requires

(a)

Act means the Finance Act, 1994 (32 of 1994);

(b) input shall have the meaning assigned to it in clause (k) of rule 2 of the CENVAT Credit Rules, 2004;
(c) input service shall have the meaning assigned to it in clause (l) of rule 2 of the CENVAT Credit Rules, 2004;
(d) output service shall have the meaning assigned to it in clause (p) of rule 2 of the CENVAT Credit Rules, 2004;
(e) India includes the designated areas in the Continental Shelf and Exclusive Economic Zone of India as declared by the notifications of the Government of India in the Ministry of External Affairs numbers S.O.429 (E), dated the 18th July, 1986 and S.O.643(E), dated the 19th September 1996;
(f) 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. Taxable services provided from outside India and received in India. Subject to section 66A of the Act, the taxable services provided from outside India and received in India shall, in relation to taxable services 

                           

(i)

specified in sub-clauses (d), (p), (q), (v), (zzq), (zzza), (zzzb), (zzzc), (zzzh), (zzzr), [(zzzy), (zzzz) and (zzzza)]1 of clause (105) of section 65 of the Act, be such services as are provided or to be provided in relation to an immovable property  situated in India;

 

specified in sub-clauses (a), (f), (h),(i), (j), (l), (m), (n), (o), (s), (t), (u), (w), (x), (y), (z), (zb), (zc), (zi), (zj), (zn), (zo), (zq), (zr), (zt), (zu), (zv), (zw), (zza), (zzc), (zzd), (zzf), (zzg), (zzh), (zzi), (zzl), (zzm), (zzn), (zzo), (zzp), (zzs), (zzt), (zzv), (zzw), (zzx), (zzy), (zzzd), (zzze), (zzzf), and (zzzp) of clause (105) of section 65 of the Act, be such services as are performed in  India:

 

Provided that where such taxable service is partly performed in India, it shall be treated as performed in India and the value of such taxable service shall be  determined under section 67 of the Act and the rules made thereunder;

  specified in clause (105) of section 65 of the Act, but excluding
  (a) sub-clauses (zzzo) and (zzzv);
  (b) those specified in clause (i) of this rule except when the provision of taxable services specified in clauses (d), (zzzc), and  (zzzr) does not relate to immovable property; and
  (c)

those specified in clause (ii) of this rule, be such services as are  received by a recipient located in India  for use in relation to  business or commerce.

(ii) specified in sub-clauses (a), (f), (h), (i), (j), (l), (m), (n), (o), (s), (t), (u), (w), (x), (y), (z), (zb), (zc), (zi), (zj), (zn), (zo), (zq), (zr), (zt), (zu), (zv), (zw), (zza), (zzc), (zzd), (zzf), (zzg), (zzh), (zzi), (zzl), (zzm), (zzn), (zzo), (zzp), (zzs), (zzt), (zzv), (zzw), (zzx), (zzy), (zzzd), (zzze), [(zzzf), (zzzp), (zzzzg), (zzzzh) and (zzzzi)]3 of clause (105) of section 65 of the Act, be such services as are performed in India :

    Provided that where such taxable service is partly performed in India, it shall be treated as performed in India and the value of such taxable service shall be determined under section 67 of the Act and the rules made thereunder;

[ Provided further that where the taxable services referred to in sub-clauses (zzg), (zzh) and (zzi) of clause (105) of section 65 of the Act, are provided in relation to any goods or material or any immovable property, as the case may be, situated in India at the time of provision of service, through internet or an electronic network including a computer network or any other means, then such taxable service, whether or not performed in India, shall be treated as the taxable service performed in India; ]2

(iii) specified in clause (105) of section 65 of the Act, but excluding,

a)     sub-clauses (zzzo) and (zzzv);

(b)      those specified in clause (i) of this rule except when the provision of taxable services specified in clauses (d), (zzzc), and (zzzr) does not relate to immovable property; and

(c)      those specified in clause (ii) of this rule, be such services as are received by a recipient located in India for use in relation to business or commerce.

 [ Provided that where the taxable service referred to in sub-clause (zzzzj) of clause (105) of section 65 of the Act is received by a recipient located in India, then such taxable service shall be treated as taxable service provided from outside India and received in India subject to the condition that the tangible goods supplied for use are located in India during the period of use of such tangible goods by such recipient. ]4

 

4. Registration and payment of service tax. The recipient of taxable services provided from outside India and received in India shall make an application for registration and for this purpose, the provisions of section 69 of the Act and the rules made thereunder shall apply.

 

5. Taxable services not to be treated as output services. The taxable services provided from outside India and received in India shall not be treated as output services for the purpose of availing   credit of duty  of excise paid on any input  or service tax paid on any input services under CENVAT Credit Rules, 2004.

____________________________________________________________________

Superscripts indicating amendments

1 Inserted vide Notification No.31/2007 dated 22.05.2007 but effective from 01.06.2007

Inserted vide Notification No.08/2008 dated 01.03.2008

3  Substituted vide Notification No.21/2008 dated 10.05.2008

Inserted vide Notification No.21/2008 dated 10.05.2008

(The principal rules were notified vide notification no. 11/2006-Service Tax, dated the 19th April, 2006)

 

 
 
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