TaxTMI 
TaxTMI 
2016 (5) TMI 750
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....ough its website. In respect of such services, the customers would make the payment to WWD US online. For making such payment, in case the customers use an international credit card, they will be able to make the payment directly to WWD US in US Dollars. Customers will also be able to pay for the services by using their Indian credit cards for bank payment facilities and make payments in Indian Rupees ('INR'). To enable customers using Indian credit card to pay for the services in INR, WWD US desires the applicant to provide payment processing facilities in India and collect money from the customers of WWD US in India and remit the same to WWD US. As far as provision for the payment collection services to WWD US is concerned, the applicant shall outsource the said activity to a third party service provider in India, who would provide necessary payment collection gateway facility to the customers, who may wish to effect payment in INR by using their Indian credit cards. Towards this, the applicant proposes to open a separate bank account in India wherein the payment collection gateway company appointed by the applicant will deposit the money so collected from the customers of WWD US....
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....ich are available online on WWD's website. WWD US hosts the website of its users on its servers/dedicated servers located outside India. Such websites are accessible from the servers by anyone on a 24x7 basis. WWD US also offers to install and configure supporting applications for such websites on its servers. c. Designing services: WWD US assists its users in creating various designs for website header, website content, website logo, business card, letter head etc., so that the users can build their own website. The relevant tools and applications required for the above services are available on a WWD US website. d. Sale of on-demand products: WWD US also provides its domain users with email, calendar and other standard services with limited features. Additional features (like multiple email ids', additional space, synchronization etc.) are also available to the users for a service fee, which varies based on the service level requested by the users. WWD US also provides Secure Sockets Layer ('SSL') certification services, which ensures that the message to be sent is properly encrypted and reaches the intended recipient. 3. In light of the aforesaid submissions on facts, the app....
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....ed that on the subject issue, applicant submits that the place of provision of service should be the location of recipient of service i.e. U.S.A. as per Rule 3 of POPS, whereas Revenue submits the place of provision of service as location of service provider i.e. India under Rule 9(c) of said Rules. Relevant Rules of POPS are extracted as under: Rule 3Place of provision generally The place of provision of a service shall be the location of the recipient of service: PROVIDED that in case the location of the service receiver is not available in the ordinary course of business, the place of provision shall be the location of the provider of service. Rule 9Place of provision of specified services The place of provision of following services shall be the location of the service provider:- (a) Services provided by a banking company, or a financial institution , or a nonbanking financial company, to account holders; (b) Online information and database access or retrieval services; (c) Intermediary services; (d) Service consisting of hiring of all means of transport other than,_ (i) Aircrafts, and (ii) Vessels except yachts, Up-to a period of one month Rule 2 Definitio....
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....son who provides the main service on his own account. In the present case, applicant is providing main service i.e. "business support services" to WWD US and on his own account. Therefore, applicant is not an "intermediary" and the service provided by him is not intermediary service. 8. In view of above, place of provision of service would be location of recipient of service i.e. WWD US under Rule 3 of POPS. Therefore, we rule as under; In the facts and circumstances of the case, the place of provision of payment processing service by the applicant, is outside India in terms of Rule 3 of Place of Provision of Services Rules, 2012. Question No.2: Whether in the facts and circumstances and in the light of the answers to question 1 above, the services to be provided by the Applicant to WWD US that fall to be classified under Rule 3 of the Place of Provision of Services Rules, 2012 qualify as export of taxable services in terms of Rule 6A of the Service Tax Rules, 1994 (inserted vide Notification No. 36/2012-S.T. dated 20.6.2012) and therefore remain non-taxable for purpose of payment of service tax under the Finance Act? 9. Applicant submits that in terms of Rule 6A of Service Ta....
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....would be hired by WWD US to provide payment processing services; that applicant would be engaged in the provision of business support services to its own customer i.e. WWD US and not to the customers of WWD US in India. Under no circumstance, the applicant will provide any support to the customer of WWD US in India; that applicant will not be remunerated for its services by any customer in India; that the remuneration in respect of applicant's service will also be provided by WWD US only; that from the customer's perspective, the payment collection support is provided to the customers by WWD US only; that the customers will, for all purposes, deal directly with WWD US and not with the applicant in any manner. Applicant also relied upon Service Tax: An Education Guide dated 20th June, 2012 issued by Ministry of Finance, Department of Revenue, Tax Research Unit ('TRU'), wherein a service receiver is defined as under: "Normally, the person who is legally entitled to receive a Service and therefore, obliged to make payment, is the Receiver of a service, whether or not he actually makes the payment or someone else makes the payment on his behalf." 12. It observed that payment process....