Place of Provision of Services

Place of provision of services plays an important role in determining the applicability of service tax on export of services. The following rules are applicable for determining the place of provision of services, as per the Service Tax Act.

General Rule

The place of provision of service is the location of the service recipient. If the location of the service recipient is not available, then the location of service provided will be as per the place of provision of services listed below.

Performance-Based Service

If goods are physically made available to the service provider by the service recipient, then the location where the services are actually performed would be the place of provision. For example: Repairing computers, warehousing and others where goods are physically made available to the service provider by the service recipient.

If services mentioned above are provided from a remote location by way of electronic means, then the location, where the goods are situated at the time of provision of services will be the place of provision of services.

Place of provision of services rules will not apply in the case of a service provided in respect of goods that are temporarily imported into India for repairs, reconditioning or reengineering for re-export, subject to other conditions.

In case of service rendered, which required the physical presence of an individual and the service provider at the time of performance of services, then the location where the services were performed will be the place of provision of services. i.e medical tourism.

Services Relating to Immovable Property

In case of services relating to immovable property, the place where the immovable property is located or intended to be located will be the place of provision of services.

Some of the services relating to immovable property falling under this category are:

Services provided by experts and estate agents;
Provision of hotel accommodation by a hotel, inn, guest house, club or campsite;
Grant of rights to use immovable property;
Services for carrying out or co-ordination of construction work, including architects or interior decorators;

Services Relating to Events

For service provided by way of admission or conducting of cultural, artistic, sporting, scientific, educational, or entertainment event, or a celebration, conference, fair, exhibition, or similar events, the place where the event is actually held will be the place of provision of services.

Service Provided at Multiple Location

In case of performance-based services, services relating to events and services relating to immovable property which are provided at more than one location, including a location in India, the location in the taxable territory where the greatest proportion of service provided will be the place of provision of services.

Provider and Recipient in the Taxable Territory

If the location of the provider of service as well as that of the recipient of service is in the taxable territory, then the location of the recipient of service will be the place of provision of a service.

Place of Provision for Specified Services

The place of provision for the following specified services shall be the location of the service provider:

Services provided by a banking company, or a financial institution, or a non-banking financial company, to account holders;
Online information and database access or retrieval services;
Intermediary services;
Service consisting of hiring of means of transport, upto a period of one month.

Goods Transportation Services

The place of provision of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of the goods. Also, the place of provision of services of goods transportation agency will be the location of the person liable to pay tax.

Passenger Transportation Service

The place of provision of service for passenger transportation service is the place where the passenger embarks on the journey.

Services Onboard a Conveyance

The first scheduled point of departure of that conveyance for the journey is the place of provision of services for services provided on board a conveyance.

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