Convert to 1000's or Lacs

If you have large set of data in the units and you want to quickly convert into 1000’s or lacs or any denominator, use divide function in Paste Special command,

 

The same applies if you want to multiply too….

 

 

 

Use of IF Command - Spreadsheet

In your day to day activities, start using IF command to get a desired response from number

 

Syntax

If( Condition, Action if True, Action if false)

 

Ex: I have a series of line itesm with slno in Column’B’, I want to know if there is any record missing. So I write this command in column ‘c’

=IF(B9=B8+1,"","Record Missing: "&B9-1)

 

Input function

 

Output

 

 

There could be multiple scenarios that you could use…

 

Thought for the day_25th June, 2013

 

THOUGHT FOR THE DAY  Don't make your voice loud to make others listen to you…Make your attitude so loud that others want to listen to you 25th June,  2013

 

 

Thought for the day_24th June, 2013

 

THOUGHT FOR THE DAY You need not feel guilty about not being able to keep your life perfectly balanced. Juggling everything is too difficult. All you really need to do is catch it before it hits the floor 24th June,  2013

 

 

Goal Seek

Have you ever tried exploring getting the desired value…..??

 

Excel has an option to predict the required Input based on the desired output….explore it here…

 

Data>>What if Analysis >> Goal Seek

 

 

Old users of Excel

 

Tools >> Goal Seek

Structure and validation of PAN

• PAN structure is as follows: AAAAA9999A: First five characters are letters, next 4 numerals, last character letter.
• The first three letters are sequence of alphabets from AAA to zzz
• The fourth character informs about the type of holder of the Card.Each assesse is uniquely

C — Company

P — Person

H — HUF(Hindu Undivided Family)

F — Firm

A — Association of Persons (AOP)

T — AOP (Trust)

B — Body of Individuals (BOI)

L — Local Authority

J — Artificial Judicial Person

G — Government

• The fifth character of the PAN is the first character
  • (a) of the surname / last name of the person, in the case of a "Personal" PAN card, where the fourth character is "P" or
  • (b) of the name of the Entity/ Trust/ Society/ Organisation in the case of Company/ HUF/ Firm/ AOP/ BOI/ Local Authority/ Artificial Jurdical Person/ Govt, where the fourth character is "C","H","F","A","T","B","L","J","G".

• The last character is a alphabetic check digit.

Nowadays, the DOI (Date of Issue) of PAN card is mentioned at the right (vertical) hand side of the photo on the PAN card.

The central government has introduced a new online service called "Know Your PAN" to verify or validate new and existing PAN numbers,

Thought for the day_19th June, 2013

 

THOUGHT FOR THE DAY By communicating from your perspective you win other's mind.  By communicating from other's perspective you win their heart  19th June,  2013

 

 

Visible Cells

Do you know in excel you have an option to select/copy only visible cells.

 

Use Goto Command (F5) >>

 

Click on Special >> select Visible

 

Detailed analysis of new TDS Section 194IA

Detailed analysis of new TDS Section 194IA

---

W.e.f 01/06/2013, new TDS section brought into effect for deduction of tax while making payment for purchase of immovable property other than agricultural land in rural area in India-

Following are the conditions and operational mechanism- 

(1) Type person covered: Purchaser and seller may be anyone i.e. either individual/HUF/AOP/BOI/Partnership firm/LLP/Company/Artificial juridical person. 

(2) Rate of tax deduction: Tax needs to be deducted at source @1% on purchase value of immovable property if the same exceeds Rs.50 lakhs per property. If seller doesn't have PAN no., tax needs to be deducted @ 20% instead of 1% 

(3) Time of Tax deduction: Tax needs to be deducted at the time of payment to seller or at the time of booking in books of purchaser, whichever is earlier 

(4) Due date of deposit of tax deducted: Tax deducted as above needs to be deposited within 7 days of next month. TDS should be deposited only through online payment. New challan cum statement form framed for payment i.e. 26QB. 

(5) Type of property covered: Both residential and commercial property covered under the provision. 

(6) Whether TAN required for purchaser: No need to register for TAN no. with department. You can use your PAN no. to deposit tax deducted from payment made to seller

(7) Issue of TDS certificate: Every purchaser of property who has deducted TDS under the said provision need to issue TDS certificate in form 16B within 15 days from due date of deposit i.e. by 22nd of next month in which tax has been deducted. Right now no mechanism in place of issue of system generated TDS certificate as we have in case of form 16A and form 16, so you need to issue TDS certificate manually 

(8) In case of property finance through loan: A standing instruction shall be furnished to bank to remit amount directly to seller after deducting TDS @1% of the total payment made and asked to deposit the same with government by them directly. 

(9) In case of purchase of property from seller with consideration to pay in installments, then TDS shall be deducted @1% on all the installments which are due on or after 01.06.2013 

(10) No need to file TDS return separately on quarterly basis- TDS challan cum statement i.e. 26QB shall need to use for remitting TDS amount to government which covers all the details as required to be furnished under TDS return. 

(11) Exemption limit: No TDS required to be deducted where consideration is less than Rs.50 lakhs. The limit of Rs. 50 lakhs is per property and not aggregate value of consideration of all properties during the year. 

There are various clarifications still remained unresolved. Hope government will come out of circular for effective implementation of the said section.

---

Source : Notification No. 39/2013 dated 31/05/2013 and Finance Act, 2013 - 

Amendments in Rules 10A, rule 10AB, rule 10B, rule 10C, rule 10D, rule 10E and Substitution Of Form NO.3CEB - Income-tax Rules, 1962

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II,SECTION 3, SUB-SECTION (ii)]
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
[CENTRAL BOARD OF DIRECT TAXES]
Notification
New Delhi, the 10th June, 2013

INCOME-TAX

S.O 1491 (E) In exercise of the powers conferred by sub-sections (1) and (2) of section 92C, section 92D and section 92E read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-
1. (1). These rules may be called the Income-tax (Sixth Amendment) Rules, 2013.
 (2). They shall be deemed to have come into force with effect from the 1st day of April, 2013.

2. In rule 10A of the Income-tax Rules, 1962 (hereafter referred to as the principal rules), -
(i) for the figures and letter "10B", the figures and letters "10AB" shall be substituted;
(ii) the clause (a) shall be renumbered as clause (ab) and before the clause as so renumbered, the following clauses shall be inserted, namely: -
'(a) "associated enterprise" shall,-
(i) have the same meaning as assigned to it in section 92A; and
(ii) in relation to a specified domestic transaction entered into by an assessee, include ---
(A) the persons referred to in clause (b) of sub-section (2) of section 40A in respect of a transaction referred to in clause (a) of sub-section (2) of the said section;
(B) other units or undertakings or businesses of such assessee in respect of a transaction referred to in section 80A or, as the case may be, subsection (8) of section 80-IA;
(C) any other person referred to in sub-section (10) of section 80-IA in respect of a transaction referred to therein;
(D) other units, undertakings, enterprises or business of such assessee, or other person referred to in sub-section (10) of section 80-IA, as the case may be, in respect of a transaction referred to in section 10AA or the transactions referred to in Chapter VI-A to which the provisions of sub-section (8) or, as the case may be, the provisions of sub-section (10) of section 80-IA are applicable;
        

(aa) "enterprise" shall have the same meaning as assigned to it in clause (iii) of section 92F and shall, for the purposes of a specified domestic transaction, include a unit, or an enterprise, or an undertaking or a business of a person who undertakes such transaction;'.

3. In rule 10AB of the principal rules, after the words "international transaction", the words "or a specified domestic transaction" shall be inserted.
4. In rule 10B of the principal rules, -
(i) for the words "an international transaction", wherever they occur, the words "an international transaction or a specified domestic transaction" shall be substituted;
 (ii) for the words "the international transaction", wherever they occur, the words "the international transaction or the specified domestic transaction" shall be substituted;
 (iii) for the words "international transactions", wherever they occur, the words "international transactions or specified domestic transactions" shall be substituted;
(iv) in sub-rule (1), in clause (d), in the proviso, for the words "type of international transaction", the words "type of international transaction or specified domestic transaction" shall be substituted.

5. In rule 10C of the principal rules, -
(i) in sub-rule (1),-
(a) for the words "particular international transaction", the words "particular international transaction or specified domestic transaction" shall be substituted;
(b) after the words "in relation to the international transaction", the words "or the specified domestic transaction, as the case may be" shall be inserted.
(ii) in sub-rule (2), for the words "the international transaction", wherever they occur, the words "the international transaction or the specified domestic transaction" shall be substituted.
6. In rule 10D of the principal rules, -
(i) for the words "the international transaction", wherever they occur, the words "the international transaction or the specified domestic transaction" shall be substituted;
 (ii) for the words "an international transaction", wherever they occur, the words "an international transaction or a specified domestic transaction" shall be substituted;
 (iii) in sub-rule (1),-
(a) in clause (b), after the words "with whom international transactions", the words "or specified domestic transactions, as the case may be," shall be inserted;
(b) in clause (d), after the words "international transactions", the words "or specified domestic transactions" shall be inserted;
(c) in clause (f), after the words " the international transactions", the words "or the specified domestic transactions" shall be inserted;
(d) in clause (g),−

(I) after the words "comparability with the international transactions", the words "or the specified domestic transactions" shall be inserted;
(II) after the words "pricing of the international transactions" occurring at the end, the words "or specified domestic transactions, as the case may be" shall be inserted;

(e) in clauses (h) and (i),for the words "international transaction", the words "international transaction or specified domestic transaction" shall respectively be substituted;
(iv) in sub-rule (2), for the words, brackets and figure "Nothing contained in sub-rule (1) shall", the words, brackets and figure "Nothing contained in sub-rule (1), in so far as it relates to an international transaction, shall" shall be substituted;
(v) in sub-rule (3), in clause (e), after the words "international transactions", the words "or the specified domestic transactions, as the case may be" shall be inserted;
 (vi) in sub-rule(4), in the proviso, after the words "terms of the international transaction", the words "or the specified domestic transaction, as the case may be" shall be inserted.
7. In rule 10E of the principal rules, after the words "international transaction", the words " or a specified domestic transaction" shall be inserted;

8. In Appendix-II of the principal rules, for Form No.3 CEB, the following Form shall be substituted, namely: -

 

ICAI clarification regarding news on Bank Branch Audit Limit.

 

Center Across the cells

Excel :

 

Alternative to Merge & Center, you can use center across the cells, this will allow to retain the feature of cells and yet the text will be centered automatically….

 

You will find this option in format cells

 

 

Thought for the day_14th June, 2013

THOUGHT FOR THE DAY   Always be on the lookout for new ways to do old things, and keep your mind open to using alternative methods and plans of action 14th  June,  2013

Screen Clipping

If you have ‘One Note’ installed on your machine you can use Start button+ S to do the screen clipping and you can either send it to OneNote of copy to clipboard and paste it in the report

Thought for the day_13th June, 2013

THOUGHT FOR THE DAY   Everything in life is valuable and precious only at two times.  First before getting it and Second after losing it. Otherwise the same has no value 13th  June,  2013

Edit PDF content in Word

Do you know you can open PDF Files in the word document also?

Here is the solution : Open PDFs and edit the content in Word. Edit paragraphs, lists, and tables just like familiar Word documents. Take the content and make it look great.

Download this helpful PDF from the Office site to try in Word or pick a PDF file on your computer. In Word, click File > Open and navigate to the PDF. Click Open to edit the content or read it more comfortably using the new Read Mode.

Place of Provision of Services Rules [ Including issues]

Introduction

Under earlier method of taxation (positive list based) the services which were provided in India were taxable, without any distinction of from where. Section 66A was introduced to tax services which was provided from outside India and received in India (commonly known as import of services). At same time there was relaxation from payment of service tax for services considered as Export of services in terms of the conditions set out in Rules.

The Rules governing export of services was the Export of Service Rules , 2005 and rules governing the services provided from outside India was Taxation of Services (Provided from Outside India and Received in India) Rules, 2006. However, in light of new service tax law, these rules are not be applicable from 01.07.2012 and those concepts also would not be applicable. Now the place of provision of Service Rules, 2012 has to be considered to ascertain local or international transactions.

What is Relevance of Place of Provision of Service?

With the introduction of new scheme of tax, the determination of tax is dependent upon whether the services are provided within the taxable territory or not. If it is provided within the taxable territory, it would be taxable and if not in taxable territory not taxable. This would be the position irrespective where the service provider or service receivers are located.

Services being intangible it requires guidelines as to determination of the place providing service to ascertain taxability considering whether it is provided within taxable territory or not. For providing such guidelines Place of Provision of Services Rules, 2012 was notified.

Determining Location of service provider and location of service receiver

Before we go to indentify the place of provision of service, one has to first identify where the location of service provider and location of service receiver.

The location of a service provider or receiver (as the case may be) is to be determined by applying the following steps sequentially:

<![if !supportLists]>A.     <![endif]>If the service provider/receiver has obtained only one registration, may be centralized (in case of multiple places) or otherwise (having only one place) - the premises for which such registration is taken is the location

<![if !supportLists]>B.     <![endif]>In other cases i.e. either no registration is taken or multiple registration is taken the location of service provider/receiver is identified sequentially as follows:

<![if !supportLists]>a.     <![endif]>If services are provided from Business Establishment (place where management and control exist) – Place of such business establishment is the location

<![if !supportLists]>b.     <![endif]>If services are not so provided but from other establishment (fixed establishments) – Place of such fixed establishment is the location

<![if !supportLists]>a.     <![endif]>If the services are provided from / received by more than one locations - the establishment most directly concerned with the provision of service / use of the serviceis the location

<![if !supportLists]>b.     <![endif]>In the absence of any places mentioned above – usual place of residence is the location.

Determination of place of provision

The Place of Provision of Services has been structured by breaking up the services from Rule 4 to Rule 12 into sectors i.e. on following basis (separately explained later as to its scope):

<![if !supportLists]>a.     <![endif]>Rule 4-Based on the performance of service

<![if !supportLists]>b.     <![endif]>Rule 5-Based on location of immovable property

<![if !supportLists]>c.      <![endif]>Rule 6-Based on place of holding event

<![if !supportLists]>d.     <![endif]>Rule 7-Based on performance of services at more than one location

<![if !supportLists]>e.     <![endif]>Rule 8-Based on the provision of service where provider and recipient both located in taxable territory

<![if !supportLists]>f.       <![endif]>Rule 9-Based on specified services where place of provision is at location of service provider

<![if !supportLists]>g.     <![endif]>Rule 10-Based on destination based transportation of goods services

<![if !supportLists]>h.     <![endif]>Rule 11- passenger transportation service based on place where the passenger embarks on the conveyance for a continuous journey,

<![if !supportLists]>i.       <![endif]>Rule 12- based on services provided on board conveyance in course of a passenger transport operation.

When none of these specific rules is applicable, thenthe place of provision is determined based on default Rule 3, according to which, the place of provision of service would be based on location of recipient of service. However, in the ordinary course of business, the location of service receiver is not available (say for example walk in customers where the location of service receiver is not known ordinarily), thenthe place of provision is the place of the service provider. 

Power of Central Government to notify the place of provision

In addition to the above determination as mentioned above, Rule 13 empowers the Central Government to notify the type of services or circumstances in which cases the place of provision would be the place of effective use and enjoyment of a service. As on date the Central Government has not notified any type services in this regard.

Resolving conflict in case more than one rule covering the situation.

As per Rule 14, provides that where the place of provision of a service could be determined under more than one rule as it fits in there, it has to be determined according to the rule that occurs later among the rules that are equally meriting consideration.

For example based on the performance rule (Rule 4) the place of provision is say New-York, however by virtue of Rule 8 (which provides that if both provider and receiver are located in taxable territory the location of receiver of service to be taken) the place of provision is New Delhi, the place of provision would be New-delhi as Rule 8 occurs later amount Rule 8 and Rule 4.

What is Place of provision of service as per the specific rules?

The brief scope and coverage of each rule is as follows:

Sl. no.	Relevant Rule	Situations	Place of provisions of Service
1	3	On General basis	<![if !supportLists]>-        <![endif]>Location of service receiver <![if !supportLists]>-        <![endif]>if the location of the service receiver not available in the ordinary course of business - the location of the service provider.
2	4	Performance base services:
a)		Services provided in respect of goods that are required to be made physically available by the service receiver to the service provideror to a person acting on behalf of the provider of service Proviso – when services are provided from a remote location by way of electronic means	Location at which services are actually performed by service provider Location at which the goods are situated at the time of provision of service.
b)		Services provided entirely or predominantly, in the ordinary course of business, in the physical presence of an individual, represented either as the service receiver or a person acting on behalf of the receiver	Location at which services are actually performed by service provider.
3	5	Services provided directly related to an Immovable property including <![if !supportLists]>-        <![endif]>services of experts and estate agents, <![if !supportLists]>-        <![endif]>provision of hotel accommodation by a hotel, inn, guest house, club or campsite, by whatever, name called, <![if !supportLists]>-        <![endif]>grant of rights to use immovable property, <![if !supportLists]>-        <![endif]>services for carrying out or co-ordination of construction work, including architects or interior decorators	Location of the immovable property located or intended to be located.
4	6	<![if !supportLists]>-        <![endif]>Admission and its ancillary services pertaining to events; <![if !supportLists]>-        <![endif]>Organization of events	Location where the event is actually held.
5	7	Multiple location based services where one of the location is in taxable territory.	Location of taxable territory where the greatest proportion of service is provided.
6	8	Where service provider and receiver are located in the taxable territory	Location of the service receiver
7	9	For specified services <![if !supportLists]>-        <![endif]>Services provided by a Banking Company, Financial Institution, Non Banking Financial Company <![if !supportLists]>-        <![endif]>Online information and database access or retrieval services <![if !supportLists]>-        <![endif]>Intermediary services <![if !supportLists]>-        <![endif]>Services consisting of hiring of means of transport, upto a period of one month	Location of the service provider
8	10	Goods Transport Services	Place of destination of goods. However, for goods transport agency, the place of provision of service shall be the location of the person liable to pay tax.
9	11	Passenger Transport Services	Place where the passenger embarks on the conveyance for a continues journey
10	12	Services provided on a board a conveyance	First scheduled point of departure of that conveyance for the journey

Note : for understanding certain terms used in this table or any other place, reference may be made to Place of Provision of Rules, 2012 for better understanding.

Issues -  Place of Provision of Services Rules

Whether service tax liability is attracted when place of provision of service as determined by applying these rules is outside India?

Comments: No, the service tax is not leviable when place of provision of service by applying the POP Rules is outside taxable territory of India. Service tax is payable merely in respect of services [other than negative list or exempted] which are provided within taxable territory of India.

Whether person who makes a payment for a service is a receiver of service?

Comments: 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.

Rule 12:

What is place of provision of service when movie on demand is provided on board a flight from Mumbai to USA?

Comments: The place of provision of service is first scheduled point of departure of that conveyance for the journey in this case Mumbai.

Rule 11:

What is the place of provision of passenger transportation services?

Comments: The place of provision of a passenger transportation service is the place where the passenger embarks on the conveyance for a continuous journey.

What does a “continuous journey” mean?

Comments: A “continuous journey” means a journey for which:-

(i) a single ticket has been issued for the entire journey; or

(ii)  more than one ticket or invoice has been issued for the journey, by one service

provider, or by an agent on behalf of more than one service providers, at the same

time, and there is no scheduled stopover in the journey

Whether a travel on Delhi-London-New York-London-Delhi on a single ticket with a halt at London on either side, or even both, will be covered by the definition of continuous journey.

Comments: All stopovers do not cause a break in continuous journey. Only the stopovers for which one or more separate tickets are issued would be considered as a break in journey. As in this case a single ticket is issued it would be considered as a continuous journey. This is covered in Rule 11. Place of provision of service is place from where passenger embarks for such journey I e Delhi.

Rule 10:

When the goods are consigned on freight paid basis by consignor company to be transported by GTA from Delhi to Amritsar, what is place of provision of service?

Comments: In case of transport of goods by GTA place of provision of service is location of person who is liable to pay freight. Accordingly place of provision of service is Delhi.

Rule 9:

Which are the services which are covered in Rule 9 of Place of Provision of Services Rules?

Comments:Following are the specified services where the place of provision is the location of the service provider:-

i) Services provided by a banking company, or a financial company, or a non-banking

financial company to account holders;

ii) Online information and database access or retrieval services;

iii) Intermediary services;

iv) Service consisting of hiring of means of transport, up to a period of one month.

Whether taxation services, international advisory assignment services provided online to US clients by an Indian tax consultancy firm is covered as online information and data base access and retrieval services in Rule 9 of POP Rules?

Comments: No, the use of the computers is secondary and primary work is business related work. This would not be covered in Rule 9. Therefore place of provision of service is not location of service provider. This could be covered in Rule 3. Then place of provision of service is location of service receiver. As recipient client is located outside, place of provision is outside India. Therefore not liable to service tax.

Whether banking services by SBI to a US bank is covered in Rule 9?

Comments: If such services are not provided to an account holder, it is not covered in this Rule. In this case services are provided to bank and not to account holder. Rule 9 is not applicable. Therefore place of provision of service is not location of service provider. In the case of any service which does not qualify as a service provided to an account holderthe place of provision will be determined under the default rule 3. The place of provision of services would be the location of the service receiver in USA. Therefore as location of recipient is outside India, place of provision of service is outside India. It is not liable to service tax in India.

Whether Indian company enabling a US company to locate and appoint a sampler in India to check quality of materials being sourced to US company is covered in Rule 9 as intermediary services?

Comments: These services could be of nature of intermediary services covered in Rule 9.“Intermediary” means a broker, an agent  or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the ‘main’ service) between two or more persons, but does not include a person who provides the main service on his account. In instant case as the Indian company has facilitated vendor to provide sampling services to US company. The place of provision is the location of the service provider Indian company in India.

Rule 8:

When the Event management company of Delhi is contracted by Dreamworks Company Bangalore to organize awards nitein UK, what is place of provision of service?

Comments:As per Rule 8 of Place of Provision of Service Rules, since both the provider and the receiver are locatedin taxable territory, the place of provision would be the location of the service receiveri.e. Bangalore. Place of provision being in the taxable territory, the service would betaxable in India.

Rule 7:

When series of Save The Earth seminars is organised by US company under contract with Non-conventional Resources company, Delhi at various locations namely at New York, London, Paris and Bangalore in India, what is place of provision of service?

Comments: The place of provision as per Rule 7 of Place of Provision of Services Rules will be the place in the taxable territory where the greatestproportion of service is provided, in this case Bangalore.As place of provision of service is in India, it is liable to service tax.

Rule 6:

What is the place of provision of services relating to event organised in Tokyo by Indian company?

Comments:Place of provision of services provided by way of admission to, or organization of a cultural,artistic, sporting, scientific, educational, entertainment event, or a celebration, conference,fair, exhibition, or any other similar event and of services ancillary to such admission, shall bethe place where the event is held. For example when event management services are provided in Tokyo by Indian company, the place of provision of services is location where event is held. As event held in Tokyo, it is not liable to service tax.

Rule 5:

Whether consultancy leading to opinion on applicability of service tax on renting of immoveable property in Delhi to UK company byconsultant in Bangalore is covered in Rule 5?

Comments:It is basically advice on indirect taxation legislation in general eventhough it relates to the subject of an immovable property. This will not be treated as a servicein respect of the immovable property. This would be covered in Rule 3, whereby the place of provision of service is location of service recipient in UK.

Whether the design services to US company by Indian firm in relation to construction of a complex in Bangalore is liable to service tax in India?

Comments:The design services related to proposed construction of a complex which is an immoveable property is covered in Rule 5. As the place of provision of service as per this rule would be proposed location of immoveable property of building. As building would be located in India. Place of provision of service is location of such immoveable property in Bangalore.Therefore liable to service tax.

Rule 4:

What is place of provision of installation services by Indian company in relation to filters sold by German company to Bangalore customers?

Comments:This is covered in Rule 4(a) as per which services in respect of goods that are required to be made physically available by the recipient of service to the provider of service. The place of provision of services is location where services are performed. These services are in respect of filters which is a goods.   The goods are made available by the service receiver in order to facilitate provision of service.  Therefore place of provision of service is place where services are performed. As services are performed in Bangalore, it is liable to service tax.

What is place of provision of service in respect of coaching by Bangalore coaching academy to US company employees provided in USA?

Comments:These are services covered in Rule 4(b) of Place of Provision of Services Rules. As per which services that are provided “to an individual which require the physical presence of the receiver with the provider for provision of the service. As coaching is provided in physical presence of the service receiver to provide coaching.It is covered in this sub-rule. The place of provision of service is location of performance of service, that is USA. Therefore not liable to service tax in India.

Rule 3:

When company in USA charges for electronic downloads of software licenses to Indian company, whether it is liable to service tax?

Comments:Such services are of nature of right to use software services which is given electronically. As software is goods. This could be covered in declared services entry of transfer of goods by hiring without transfer of right to use such goods. Therefore as services are received from outside India by recipient in India, it is taxable in hands of recipient Indian company under reverse charge mechanism.

General issues:

Whether if place of provision of service is outside India as per Place of provision of Services Rules, it is treated as export of services?

Comments:No, only if the conditions set out in Rule 6A of Service Tax Rules is fulfilled, then taxable services provided outside India is treated as export of services-

The conditions are set out below.

<![if !supportLists]>                         I.          <![endif]>The provider of service is located in the taxable territory- Yes-provider of service is located in the taxable territory of India.

<![if !supportLists]>                       II.          <![endif]>The recipient of service is located outside India- Yes-recipient of service is located outside India.

<![if !supportLists]>                     III.          <![endif]>The service is not specified under the negative list of services- Yes-the service is not specified under the negative list.

<![if !supportLists]>                     IV.          <![endif]>The place of provision of services is outside India-Yes – The place of provision of services as per Place of provision Services is outside India.

<![if !supportLists]>                      V.          <![endif]>The payment for such service has been received by the provider of service in convertible foreign exchange- Yes –the payment for such service would be received by service receiver in convertible foreign exchange and

<![if !supportLists]>                     VI.          <![endif]>The provider and the recipient of service are two distinct establishments and not merely establishments of the same person- Yes –provider of service and service receiver are two different companies. It is not merely establishments of the same person.

This conclusion would be relevant in the context of availing Cenvat credit and refund claims if any.

Whether service tax liability on services received from outside India can be paid by utilizing cenvat credits by receiver of service under reverse charge mechanism?

Comments: Due to specific restriction in cenvat credit rules wef 1.7.2012, the service receiver cannot utilize cenvat credits to pay service tax on taxable services where he is liable as a receiver of service. Earlier to that date it was possible to make such an adjustment. It was accordingly held in Aravind Fashions decision.

In recent decision in CST vs. Aravind Fashions Ltd(TIOL-2011-748-HC-KAR-ST), it was held that for the payment of service tax, importer is to be treated at par with the service provider. Held by High Court the service recipient who is liable to pay service tax, is entitled to utilize credit to discharge service tax liability.

In this article the paper writer has tried to bring an element of clarity on place of provision of service rules. In case readers have any specific queries, they may host them on www.pdicai.org.  

By - CA Madhukar N.Hiregange

Acknowledgement to CA C.K.Lakshmi for assisting in preparation of this article.

Acknowledgements to CA Roopa Nayak for preparation of the basic article.