8.1 Corresponding changes, as indicated in respect of Export of Services Rules, 2005, have been carried out by way of rearrangement of the stated services under respective sub- clauses of rule 3 of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006.  

8.2 The changes will, inter-alia, make certain services taxable if the recipient of the service is located in India even when the service is performed outside India. In order to avoid inconvenience in respect of certain services, exemption has been granted vide notification 8/2011-ST to services of transportation of goods by air or road or rail provided to a person located in India when the goods are transported from a place outside India to a destination outside India. Exemption has also been given vide notification 9/2011-ST to the transportation of goods by air service to the extent air freight is included in the customs value of goods in order to avoid taxing this service twice.  

Taxability of services received in India extended to services performed abroad when the recipient is located in India, with targeted exemptions. Amendments to rule 3 of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 treat certain services as taxable where the recipient is located in India even if performed abroad. Exemptions carve out transportation of goods by air, road or rail for persons located in India when goods move from outside India to outside India, and exempt air freight to the extent it is included in the customs value, preventing double taxation.