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.

[CA Rachit Agarwal]

In our opnion such agents are not working in capacity of "pure agent". Hence the service tax would be payable by agents. Such agents will recover service tax from the customers.

 

Regard

Rachit Agarwal

AI Summary

Service tax liability arises where agents are not pure agents and must pay and recover tax on online data services. Agents billing Indian colleges for online books and journals supplied by a US provider are not acting as pure agents; under the place of provision rules the provider's location is relevant, but because the agents perform functions beyond pure agency they are liable to pay service tax and may recover that tax from the customers.