Export of services rules ,2005 of service tax law
Export of services
As per rule 6A of service tax rules, the six essential requisites are to be fulfilled in respect to a service so as to be considered as export service:
a) It must be a service under sub -section 44 of section 65B. in other words, service shall not be covered under negative list of service provided under 66 D of the act.
b) The service provider must be located in taxable territory i.e. India
c) The service receiver is located outside India
d) The payment for such service is received by the service provider in convertible foreign exchange
e) The place of provision of the service is outside India as per the place of provision of service rules,2012
f) The service provider and the service receiver are not merely establishment of a distinct person i.e. branches of assessee in two different tax jurisdictions.
List of taxable services which have not been classified under export of services rules, 2005
- Transport of passenger by air
- Transport of persons by cruise ship
Services provided in respect of air transport of passengers embarking in India for international journey and in relation to transport of persons by a cruise ship embarking in any port in India have not been mentioned as export or import of services, hence chargeable to service tax.
Services may be exported without payment of service tax
Rule 4 of export of service tax rules, 2005 provides that any service, which is taxable under any clause (105) of section 65 of the act, may be exported without payment of service tax. This means that the service provider is not required to pay service tax on the service which is exported. This implies that the exported services remain taxable services, but attract nil rate of service tax.
Rebate of service tax Rule 6A(2) of service tax rules,1994 provides power to the government to grant rebate of service tax or duty paid on input services or inputs, used in providing services which are considered to be exported.
Taxation of services (provided from outside India and received in India ) rules,2006 Taxation of services (provided from outside India and received in India) rules, 2006 has been formulated on the lines of export of services rules. These rules have classified all the categories of taxable services on the following basis-
- Services related to immovable property
- Services related to performance of services
- Services related to recipient of services