DEPARTMENT’S CLARIFICATION ON APPLICABILITY OF SERVICE TAX ON OVERSEAS TRADE FAIRS/ EXHIBITION UNDER ‘BUSINESS EXHIBITION SERVICES’
Clarification on applicability of service tax on overseas Trade Fairs/Exhibition under ‘Business Exhibition Services’
LETTER [F.NO. 354/11/2011-TRU], DATED 22-3-2011
Please refer to your letter dated 18-11-2010 addressed to the Revenue Secretary, Ministry of Finance, North Block, New Delhi on the above subject.
2. The matter has been examined. As per your letter, organizing a business exhibition involves three activities viz. (a) hiring of premises outside India, (b) arranging/coordinating installation of stalls and (c) renting of stalls to Indian Exhibitors. The first two activities are the services received by CII from outside India and third activity is service provided by CII within India.
3. The first two activities are services performed entirely outside India and thus will not qualify for taxation as per Taxation of Services (Provided from Outside India & Received in India) Rules, 2006, being Category I and Category II services respectively.
4. The third activity is service provided by CII to Indian Exhibitors to participate in exhibition held abroad and does not qualify as export as the consideration is not received by CII in convertible foreign currency as provided under Rule 3(2)(b) of the Export of Services Rules, 2005.
5. As the notification No. 5/2011-ST, dated 1-3-2011 exempting Business Exhibition Service when provided by an organiser of business exhibition for holding a business exhibition outside India has been issued, the scope of this clarification will be limited till 28-2-2011.