Import of Service

[KIRAN KUMAR]

Dear Sir,

We Paid Best Aquaculture Practice (BAP) Certification Renual fee to Global Aqua Culture Alliance in Foreign currency for 2015-16

Now in Service tax assessment department given notice that this is import of service you have to pay service tax on reverse charge

Requesting you to provide the rules

[Rajagopalan Ranganathan]

Sir,

The service received by you is to be classified under Technical Testing and Certification Service. This service is not included in Section 66D of finance Act, 1994 or not covered by the mega exemption Notification No. 25/2012-ST dated 20.6.2012 as amended. Therefore you had imported the said service and you have to pay service tax on such service under reverse charge mechanism. \Department's contention is legally valid.

[Ganeshan Kalyani]

It amounts to import of service. However in my view renewal fees paid to government will not attract service tax.

[Guest]

---

"We Paid Best Aquaculture Practice (BAP) Certification Renual fee to Global Aqua Culture Alliance in Foreign currency for 2015-16"

The background fact, so cryptically stated, is not adequate to clearly understand. Be that as it may,
for finding an answer, the true nature of the transaction, and of the certification fee received therefor, might have to be gone into and ascertained.

Tentatively, it appears to involve, rather depends upon, whether the 'service' provided could be regarded
to have been 'in India',within its legal connotation,in order to attract taxation in India. To be precise, the matter may entail a 'jurisdictional' issue.For an appreciation, in proper light, suggest to look up say, the personal comments on the same issue posted on the Taxguru website, more than once. Also personal thoughts /viewpoints shared on Facebook and LInkedin, as well..

Courtesy

[Guest]

To share MORE:

https://www.indiafilings.com/learn/gst-applicable-imported-services/

OWN Comment >

OFFHAND (Tentative)

The concept of 'reverse charge' is prima facie highly objectionable, on first principles / grounds of common law; may be contestable on the ground, logically, that it is a bold but insensible idea to clear steer away from the fundamental legal principle. That is, for any levy, it is the consideration received for service rendered, that is to be taxed; and so to be taxed, if so permissible and lawful, in the hands of the recipient, not of the payer.

To be noted, irrationally, it is tantamount to a double whammy; for any 'export' of serviced is also sought to be taxed, as separately provided.

The novel concept , in one's perception, is akin to the comical bet- " If head i win, if tail you lose !

Open to be enlightened should any Expert of eminence/ well informed, at large, in field practice, entertain a well -thought out contrary but better view !

As brought out before, upfront , the aspect of Indian jurisdiction to tax calls for focus/ an incisive consideration. For doing so, the case law on the selfsame aspect under the income-tax regime should be gone through , for useful guidance.

AI Summary

Import of Service: reverse charge applies where offshore certification services are not covered by exemption, recipient liable for tax. Payment of a foreign certification renewal fee for Best Aquaculture Practice is classified as Technical Testing and Certification Service and, since it is not covered by the specified exclusions or the mega exemption, it constitutes an import of service. Consequently, the Indian recipient is generally liable to pay service tax on such imported services under the reverse charge mechanism, subject to further jurisdictional analysis of whether the service is deemed received in India or any specific exemption (e.g., fees to government-like bodies) applies.