• Gist of changes made in Service Tax by the Finance Act 2003

• Gist of changes made in Service Tax by the Finance Act 2004

• Export of Services

• Service Tax On Concern Other Than Commercial Concern

• Service Tax Credit Rules, 2002

• CENVAT Credit Rules, 2004

EXPORT OF SERVICES

A write up on draft rules on export of taxable services

Preliminary:

The service tax extend to all of India except Jammu and Kashmir and includes the specified designated areas in the Continental Shelf and Exclusive Economic Zones of India. Therefore, any service performed outside India does not attract service tax.

The Government has now announced draft rules on how export of services will be determined in respect of various categories of taxable services.

For this purpose the services are grouped in 3 broad categories as follows:-

1.0	Services related to immovable properties. Architect Services, Interior Decorator’s services, Real Estate Agent’s services, Construction.
•	The services will be determined as export, in relation to location/ situs of the immovable property in respect of which it is rendered For e.g. the real estate agency services will be treated as export if the services is in relation to property situated outside the India. India.
2.0	The service will be treated as a export of services if the same is performed outside India. Stock Broker, Custom House Agent Service, Clearing & Forwarding Agent Service, Chartered Accountant’s Service, Cost Accountant’s Service, Company Secretary’s Service, Credit Rating Agency Service, Market Research agency service, Underwriting services, Fashion Designers services, Survey & Exploration, Forward Contract, Dry Cleaning services, Storage & warehousing, Repair & Maintenance, Courier Agency Service, Steamer Agents, Air Travel Agent, Mandap Keepers, Tour Operator, Rent-a-Cab Operator, Security/Detective Agency, Photography Services, Video-tape Production service, Sound Recording Service, Port Service, Authorised Service Station Service for motor vehicles, Beauty Treatment Service, Cargo Handling Service, Event Management Service, Health Club And Fitness Centres, Rail Travel Agent’s Service, Commercial Training & Coaching, Internet Café, Technical Testing & analysis, Technical Inspection and certification, Airport services, Air transport, Business exhibition, Road transport, Opinion poll, Outdoor catering, Pandal and shamiana contractor, Travel agent.
•	The concession is given in respect of these services as even if it is partly performed outside India it shall be treated as export.
3.0	In respect of other services (as mentioned below) export of services will be determined on the basis of location of the recipient of the services. Therefore if the recipient of the services is located outside India then only the service will be treated as export of service. Telephone, Pager, General Insurance, Advertising agency, Consulting engineers, Manpower Recruitment agency, Management consultancy, Scientific and Technical consultancy, Leased circuits, Telegraph service, Telex service, On-line information and database access and / or retrieval services, Broadcasting service, Insurance auxiliary service, Banking and other financial services, Cable operators, Insurance Auxiliary services relating to life insurance, Business auxiliary service, Franchise service, Intellectual Property service, Programme producer.
•	It is further provided that incase of services (mentioned in this paragraph) used in or in relation to commerce or industry then if such recipient has any commercial or industrial establishment or any office relating thereto in India then the service will not be regarded as export.
4.0	Notwithstanding anything mentioned above, any taxable service provided in relation to export of goods shall be treated as export of service.
5.0	Rebate of service tax The Central Government may issue suitable notification to grant rebate of service tax paid on such taxable service or duty paid on input used in providing such taxable service subject to limitation, condition & procedures as may be specified therein.
6.0	It therefore appears that notification No. 21/2003 dated 20/11/2003 entitling the recipient of the consideration in convertible foreign exchange without having regard to the place of service or recipient of services as exempt will be redundant and should be withdrawn.