Online Data Retrevial

[Sanjeev Sharma]

A US Based company is providing Online Books & Journal to Indian clients who are mainly colleges, universities .

As per current business model, company is having subscription agents in India and who takes order from colleges/ universities. Company enters into license agreement with these colleges/ universities. But company raise bills on Agents and who raise bill on colleges/ universities.

As per new place of provision of services rules, in case of Online data retrieval services,  location of service provider will be place of services. And in the present case service provider is in USA and ultimate user is colleges/ universities .

 Since the invoices are raised by agents , who are in India, on ultimate customer, are agents liable for paying service tax on this service.

AI Summary

Indian Agents Must Pay Service Tax on Online Book Subscriptions as Per New Rules; Not 'Pure Agents' A US-based company provides online books and journals to Indian clients, primarily colleges and universities, through subscription agents in India. The company enters into license agreements with these institutions but invoices the agents, who then bill the colleges and universities. According to new service rules, the service provider's location determines the place of service. Since agents in India invoice the customers, they are responsible for paying the service tax, as they do not act as 'pure agents.' These agents will subsequently recover the service tax from the customers.