According to Section 66C of Finance Act,2012
1. The Central Government may, having regard to the nature & description of various services, by rules made in this regard, determine the place where such services are provided or agreed to be provided.
2. Any rule under subsection (1) shall not be invalid merely on the ground that either the service provider or the service receiver or both are located at a place being outside the taxable territory.
Location of Place of Provision of Service Rules,2012 (POPOS Rules) in roadmap:
ROADMAP OF SERVICE TAX
RELEVANCE
- Specify the manner to determine taxing jurisdiction for a service i.e. the place where a service shall be deemed to be provided.
- POPOS Rules has replaced Export of Services Rules,2005 & Taxation of Services (Provided from outside India & received in India) Rules,2006.
APPLICABILITY OF RULES
- Person who deals in cross border services & Person who have operations with suppliers or customers in the state of Jammu and Kashmir.
- Service provider operating within India from multiple location , without having centralized registration
- Determines whether services are wholly consumed within SEZ, to avail the outright exemption
SUMMARY OF RULES
| RULE | DETAILS | PLACE OF PROVISION | EXAMPLES
|
| Rule 3 | General rule for place of provision | Location of the recipient of service | IPR Service
|
| If not available then location of service provider | Telecommunication services, Fax service | ||
| Rule 4 | Performance based services for goods and physical presence of individual | Location where the services are actually performed | Repair Maintenance service, Dry Cleaning Service, Courier Service, Storage & Warehousing, Cosmetic Surgery, Personal Security Service, Health & Fitness etc. |
| Rule 5 | Service relating to immovable property | Place where immovable property is located or intended to be located | Construction Service, Real Estate Agent Service, Interior Decorator Service, Renting of Immovable Property etc. |
| Rule 6 | Service relating to events | Where the event is actually held | Exhibition Services, Event Organisation Services |
| Rule 7 | Service providing at more than one location | Location the taxable territory where greatest proportion of the service is provided | Architect service, Event management |
| Rule 8 | Provider and receiver are located in the taxable territory | Location of the recipient of the service | ———- |
| Rule 9 | Specified services: | Location of the service provider |
Lending, Depositing, Locker service |
| 1. Banking Co./Financial Institution | |||
| 2. Online Information & Data Base Access | Online magazines, journals, legal content | ||
| 3. Intermediary Services | Travel Agent, Tour Operator Service | ||
| 4. Hiring motor vehicles upto 1 month | Hiring fleet of cars by Co. for 25 days | ||
| Rule 10 | Goods transport services otherwise than by way of mail or courier | Place of destination of the goods | ———- |
| Goods transport agency | Location of person liable to pay tax | ||
| Rule 11 | Passenger transportation services | Place where the passenger embarks on the conveyance for a continuous journey | ———- |
| Rule 12 | Service provided on board a conveyance during the course of passenger transport operation | Starting point of that conveyance for the journey | ———- |
Rule 14 : Later is Better
(The author, Hitesh Makhija, is a student of Institute of Chartered Accountants of India . He can be reached at hitesh.makhija88@gmail.com)
