This document discusses India's place of provision rules for services for the purposes of determining service tax liability. It provides an overview of the key rules, including: 1. The general rule that the place of provision is the location of the service receiver. 2. Performance-based services are taxed where the services are physically performed. 3. Property-based services are taxed where the property is located. 4. Event-based services are taxed where the event takes place. 5. Specific categories like banking, telecom, and transport are taxed where the service provider is located. It also addresses concepts like exports of services and determining place of provision for services provided across

1. Service Tax : Place of Provision of Services
Presented by:
Ca. Jayesh Gogri

2. PLACE OF PROVISION OF SERVICES
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3. Place of provision of Services...
• Based on the principle of destination based consumption tax
• An important move towards implementation of GST
• Important to be determined in case of import and exports at present
– Imports – Reverse Charge
– Exports – Not leviable to Service Tax
• Rules introduced in 2012
• Tries to harmonise with international tax practice to ensure no double
taxation and no double non-taxation
• Later the better Rule
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4. Taxable territory
• Only the transactions in taxable territory leviable to
Service Tax
• Taxable territory: India except Jammu & Kashmir
• “India”
– not only the land mass
– territorial waters
– continental shelf
– exclusive economic zone or any other maritime zone as defined
– the sea-bed and the subsoil underlying the territorial waters
– the air space above its territory and territorial waters
– 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
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5. India (Exclusive Economic Zones)
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6. PPSR: Rule 3: General/residual rule
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Nature of service In general context
Rule The location of service receiver
Example ‘A’ receives service in Mumbai from ‘B’ of
New York. The place of provision will be
Mumbai

7. PPSR: Rule 4: Performance
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When these services are provided from a remote location by way of electronic means,
what will be the place of provision?
Nature of service Services in respect of goods that are
required to be made physically available*
Rule Performance based
Example Maintenance, Erectioning etc
* Not applicable for goods temporarily brought in India for repairs (earlier repairs,
reconditioning and reengineering)

8. PPSR: Rule 5: Property based
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Nature of service Services in relation to immovable
property
Rule Location of the property
Example Architect, hotel accommodation,
Construction etc

9. PPSR: Rule 6: Event based
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Nature of service Services in relation to events
Rule Place where it is held
Example Exhibition, conference etc.

10. PPSR: Rule 7: Greatest proportion
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Nature of service Multiple location services
Rule Place where greatest proportion of
service is provided in the taxable territory
Example ‘A’ has provided management consultancy
service to the extent of 20% in Delhi, 30%
in Mumbai and 50% in Bangkok. The Place
of Provision is Mumbai since greatest
proportion of service is provided in the
Mumbai i.e. taxable territory

11. PPSR: Rule 8: Both located in TT
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Nature of service Service provider and service receiver are
located in taxable territory
Rule The location of service receiver
Example ‘A’ receives service in Mumbai from ‘B’ of
Goa in relation to a tour in South Africa.
The place of provision will be Mumbai.

12. PPSR: Rule 9: Specified Category
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Nature of service Banking, telecommunication, online
database, intermediary*, hiring of
transport upto 1 month
Rule Place of service provider
Example ‘A’ from Mumbai provides online
database services to ‘B’ of Singapore, the
place of provision will the Mumbai
* Intermediary earlier included person who arranged or facilitated provision of
service but now will also include the persons providing above facilities w.r.t goods

13. PPSR: Rule 10: Goods Transportation
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Nature of service 1.Goods transportation(not covering mail
or courier)
2.the place of provision of services in
relation to goods transportation agency
Rule 1.Place of destination
2.The location of the person liable to pay
tax
Example •If ‘A’ of Mumbai transports goods to ‘B’
of Goa, the place of provision will be Goa.
•If A of Mumbai transports goods to B of
Kathmandu, the place of provision will be
Mumbai.

14. PPSR: Rule 11:Transportation of passengers
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Nature of service Passenger transportation services
Rule Place where the passenger embarks
Example ‘A’ from Mumbai travels to Goa by bus.
The place of provision is Mumbai.

15. PPSR: Rule 12: Services on board
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Nature of service Services on board a conveyance
Rule Place which is the first scheduled point of
departure of that conveyance for the
journey
Example ‘A’ from Mumbai travels to Goa by a flight
and during the journey, he buys food
stuff. The place of provision is Mumbai

16. Rule 6A of STR – Export of Services
Conditions for considering a service as Export
(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 3 of clause (44) of section 65B of the Act.
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17. Case Study
• If Services are provided from outside India as per PPOS Rules
• Payment is received in INR
• Will it be considered as Export?
– Rule 6A – Convertible Foreign Exchange
• If not considered as ‘Export of services’ then Liable to Service Tax???
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18. Ca. Jayesh Gogri
Director
2/22 Nityanand Nagar, Sahar Road, Andheri (East),
Mumbai-400 069.
6-A, Ranjit Studio Compound, DSP Road, Dadar (East),
Mumbai-400 014.
+91 22 2684 0208
+91 9821 012 151
+91 9870 712 151
info@gscintime.com
jayeshgogri@gscintime.com
Right advice at right time…
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