Service tax under RCM on technical fees and Website services paid to Non resident

[Prakash Gupta]

Whether Service tax is applicable on amount paid to Non resident for technical services and website services taken over the internet. Service provider Non resident never came in India to provide above mentioned services and has no permanent establishment in India. Please mentioned relevant rule and notification if possible.

Thanks ,

Pankaj

[Rajagopalan Ranganathan]

Sir,

As per rule 3 of Place of Provision of Services Rules, 2012, 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.

In your case the place of provision of service is in taxable territory, that is India. the provider of service is located in non-taxable territory, that is outside India. As per Sl. No. 10 of Notification No. 30/2012-ST dated 20.6.2012 (effective from 1.7.2012)when service provider is in non -taxable territory and service receiver is in taxable territory, the service tax is payable by service receiver, that is, you.

 

[Ganeshan Kalyani]

I agree with Rajagopalan Sir. in fact never leave any doubt to be remain in the mind of queriest. Thanks.

[Ganeshan Kalyani]

Please read with 'he' between 'in fact' and 'never leave' in my post. Sorry for mistake while posting.

[DR.MARIAPPAN GOVINDARAJAN]

I also agree on the views of Shri Rajagopalan.

AI Summary

Non-resident service providers trigger Reverse Charge Mechanism; Indian recipients pay service tax under Rule 3, 2012. A query was raised about the applicability of service tax under the Reverse Charge Mechanism (RCM) for technical and website services provided by a non-resident who has no establishment in India. The responses referenced Rule 3 of the Place of Provision of Services Rules, 2012, and Notification No. 30/2012-ST, indicating that the service tax is payable by the service recipient in India since the services are provided from a non-taxable territory. Multiple respondents agreed with this interpretation, affirming that the service recipient is responsible for the tax payment.