Import Payment for web hosting service from foreign Location

[Ajay Sharma sharma]

Dear Sir

Pl advise as to whether service tax is payable on Web hosting service received from foreign location in India, Since this service as to my knowledge falls under the specific services (Rules 9)

Online information and data base access or retrieval services

As per the place of provisioning of service rules the location of the service provider is out of the taxable territory.

Kindly advise

Thanking you

Ajay sharma

[Akash Deep]

Dear Sir

You are correct to say that activity of web hosting is covered under online database access or retrieval services. the POP of such services is to be determined under rule 9 of POP as per which location of provider of service shall be the place of provisions of service. in the this case the place of provision of service is not within the taxable territory but outside taxable territory, such transaction is not subject matter of charging section. No service tax is applicable on the amount paid to foreign service provider..

It is correct to say that in case of import of services service recipient is liable to discharge service tax liability to the extent of 100%.. However, even in this case also, charging section must be applicable to such transaction. when a transaction is not covered under operating parameters of charging section, there can be no tax liability.

no service tax is chageable on import of data base access or retrievable services.

Regards

Akash Deep

AI Summary

Place of provision: web hosting from a foreign provider falls outside taxable territory, so service tax is not payable.
Web hosting from a foreign provider is an Online Information and Database Access or Retrieval Service whose place of provision under Rule 9 is the provider's location; if that location is outside the taxable territory the transaction falls outside the charging section and service tax is not leviable, and the reverse charge/import of services rule cannot impose tax where the charging section does not apply.