Chargeability of Service Tax

Service tax chargeability hinges on taxable territory and provider location; reverse charge applies when services originate outside territory.

The Finance Act charges service tax on the value of services provided or agreed to be provided in the taxable territory, defined as India excluding Jammu & Kashmir; applicability thus depends on whether the service is provided within that territory, with collection mechanisms including reverse charge where the provider is outside the taxable territory. A prior provision treated services supplied from outside India as provided in India and placed liability on the recipient, but that provision was withdrawn following introduction of the taxable-territory concept.