The doubt was raised if the services provided by a Delhi based company for conduction of topographical survey work of project area in Jammu and Kashmir is chargeable to Service Tax, if the contract for the construction of the project in the state of J & K was awarded to Mumbai based company.

It was clarified by the Board in consultation of the Ministry of Law that even if the object of service is in the state of J & K but as the service provider and the service receiver are outside the State of J & K, the Service Tax shall be chargeable from the service provider. Commissionerate of Service Tax, New Delhi

Service Tax chargeability applies where both provider and receiver are outside a state even if the service object is within. The Board clarified that Service Tax is chargeable on the service provider when both the provider and the service receiver are located outside Jammu and Kashmir, even if the object or project area of the service is situated within Jammu and Kashmir.