PLACE OF PROVISION OF SERVICES RULES, 2012

With effect from 1^st July, 2012, Place of Provision of Services Rules, 2012 have been notified which prescribe the manner to determine the taxing jurisdiction for a service. Place of Provision of Services Rules determine the place where a service shall be deemed to be provided, in terms of Section 66C of the Finance Act, 2012.

APPLICABILITY

(i)                  Persons who deal in cross border services.

(ii)                Persons who have operations with suppliers or customers in the state of Jammu & Kashmir.

(iii)               Service providers without having centralised registration operating within India from multiple locations.

(iv)              Services that are wholly consumed within SEZ to avail the outright exemption.

NEED

As per Section 66B, Service tax shall be levied only on those services which are provided in the taxable territory. Hence it is very important to determine the place of provision of services.

RULES

RULE	NAME	PLACE OF PROVISION	EXCEPTION
RULE 3 (Main Rule)	Location of Receiver.	Location of Service Receiver.	If location of service receiver not available then place of provision shall be location of Service Provider.
RULE 4	Performance Based Services.	Where services are actually performed.	_
RULE 5	Services relating to Immovable Property.	Where Immovable Property is located or intended to be located.	_
RULE 6	Services relating to events.	Where the Event is actually held.	_

 

RULE 7		Services provided at more than one location.	Where the greatest proportion of the service is provided.	_
RULE 8		Services where provider and recipient are located in the taxable territory.	Location of the Service Receiver.	_
RULE 9		Specified Services   (i)                  Banking services provided to Account Holders     (ii)                Online information & database access and retrieval services (iii)               Intermediary Services (iv)              Service consisting of hiring of means of transport, upto a period of one month.	Location of the Service Provider.   Location of the Service Provider.         Location of the Service Provider.   Location of the Service Provider.   Location of the Service Provider.	_   Banking Services provided to persons other than Account holders then place of provision shall be the location of Service Receiver.   _   _     _
RULE 10	Goods Transportation services other than by way of mail or courier.   Goods Transportation Agency.		Destination of goods.       Location of the person liable to tax.	_       If the person liable to pay tax is located is located in located in non-taxable territory, then the person liable to pay tax is Service Provider.

RULE 11	Passenger Transporatation Service.	Where the person embarks on the conveyance for a continuous journey.	_
RULE 12	Services provided on board a Conveyance.	First scheduled point of departure of that conveyance for journey.	_
RULE 13	Powers to Notify description of services or circumstances for certain purposes   Explanation: The Central Govt. Shall have the power to notify any description of services or circumstances in order to prevent double taxation or non-taxation of provision of services.	Place of effective use & enjoyment of a service.	_
RULE 14	Order of application of Rules   Explanation:-In case where the nature of a service or the business activities of the service provider is such that two or more rules may apply then later rules would be applicable.	_	_

This Article has been Shared by Student of ICAI Palak Aggarwal. She can be reached at aggarwal.palak2809@gmail.com