Service Tax Liability

[Harsh Jindal]

If service is provided outside india (ie, non - taxable territory) but both service provider and receiver are in taxable territory, wheather Service Tax will be leviable? If yes, why?

[YAGAY andSUN]

According to Rule 8 of POPS, Where the service receiver and service provider are located in the taxable territory, the provision of service would be the location of service receiver irrespective of where the service is performed, delivered or consumed.  Therefore, service tax will be leviable in this matter.

AI Summary

Service Tax Applies When Provider and Receiver Are in Taxable Territory, Even If Service is Rendered Outside India, per Rule 8. A query was raised regarding the applicability of service tax when both the service provider and receiver are located in a taxable territory, but the service is rendered outside India. The response clarified that under Rule 8 of the Place of Provision of Services Rules (POPS), the location of the service receiver determines the tax liability. Therefore, even if the service is provided outside India, service tax is applicable because both parties are in a taxable territory.