Service Tax Applicability- Service given to Bhutan

[Sajith Nair]

A Crane Hiring Company in India signed a contract to provide their service in Bhutan, and the company raising monthly bills in Bhutan currency and they are receiving money in India.  My Query is that what will be the implication of service tax for the money received in India from Bhutan against the service provided in Bhutan?

[YAGAY andSUN]

Please check Place of Provisions of services read with point of taxation rules in this regard.

[Ramanujam Varadarajan]

The nature of the service provided and its coverage under place of provision of services rules 2012 would decide applicabilty of Service tax.

AI Summary

Place of provision of services determines service tax applicability for cross-border services performed abroad. Applicability of service tax for crane-hire services performed in Bhutan but paid into India depends on the Place of Provision of Services Rules 2012 and the Point of Taxation Rules. The nature and mode of performance of the service must be tested against those rules to determine whether the service is treated as provided in India (and thus taxable) or outside India (and thus not taxable under those provisions).