To provide a level playing field to Indian service providers, the exemption given to service providers located in foreign territory but providing taxable online information and database access or retrieval [OIDAR] services including electronic services in India, is being withdrawn with effect from 1st December, 2016.

 With a view to provide a level playing field to Indian service providers providing taxable online information and database access or retrieval [OIDAR] services including electronic services in India, the exemption to such services provided in India by service providers located in foreign territory is being withdrawn with effect from 1st December, 2016. Thus cross border business to consumer [B2C] OIDAR services provided by a foreign service provider to a person in India will become taxable from 1st December, 2016 onwards.

The salient features of this levy are as under:

  • A simplified online mechanism of taking registration has been prescribed and registration will be deemed to be granted online on submission of registration application.
  • A simplified mechanism of online payment of taxes and online filing of returns is being prescribed.

A detailed Circular No. 202/12/2016-Service Tax dated 09.11.2016 has been issued by CBEC, explaining the likely issues arising from the withdrawal of this exemption.

Useful links:

Title Notification No. Date
46 FAQs on service tax on cross border B2C OIDAR online services Circular No. 202/12/2016-Service Tax 09/11/2016
Service Tax Payment & Compliance Liability for online service provided from non-taxable territory Notification No. 49/2016-Service Tax 09/11/2016
Service Tax on Online Services provided by person located in non-taxable territory Notification No. 48/2016-Service Tax 09/11/2016
Withdrawal of ST Exemption on online information & database access or retrieval services Notification No. 47/2016-Service Tax 09/11/2016
Amendment in place of provision of ‘online information & database access or retrieval services’ Notification No. 46/2016-Service Tax 09/11/2016

 

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One response to “Tax on Online Services provided in India by foreign service provider”

  1. Nitin says:

    Whether service is taxable in INDIA as FTS (Fees for Technical Services ) if Forgein LLC provided online services to India company.

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