by g. natarajan advocate & cost accountant swamy associates

Notification 2/1999 Dt Notification 6/1999 Dt Rescinded by Notification 2/2003 Dt Notification 21/2003 Dt Rescinded by Notification 10/2005 w.e.f Era of simplicity…

Era of complexity… Export of Services Rules, 2005 Introduced vide Notification 9/2005 Dt With effect from Amended by 28/2005 Dt With effect from Amended by 13/2006 Dt With effect from

Basic thumb rules. Service must be provided from India and used outside India. Payment for such service must be received in convertible forex.

Category I The service must be in relation to immovable property situated outside India.

S.NoName of the taxable service. 1General Insurance 2Architect 3Interior Decorator 4Real Estate Agent 5Commercial or industrial Construction service. 6Site formation, clearance, excavation, earth moving, demolition and other similar services 7Dredging 8Survey and map making 9Construction of residential complex 10Auctioneering of immovable property.

S.NoName of the taxable service. 11Mining 12Renting of immovable property. 13Works Contract

Examples An Indian construction company, building a commercial complex, in Afghanistan. An interior decorator, being engaged for beautification of White House. Mining gold in Pakistan.

Category II The service must be performed outside India, at least partly.

S.No.Name of the taxable service. 1Stock broker 2Courier agency 3Custom House Agent 4Steamer Agent. 5Clearing and Forwarding Agent. 6Air Travel Agent 7Mandap Keeper 8Tour operator 9Rent a cab operator 10Chartered Accountant.

11Cost Accountant 12Company Secretary 13Security Agency. 14Credit Rating Agency 15Market Research Agency. 16Underwriter. 17Photography. 18Convention. 19Video Production Agency. 20Sound Recording.

21Port (Major Ports & Other Ports) 22Authorised Service Station. 23Beauty Parlour 24Cargo Handling. 25Dry cleaning 26Event management 27Fashion Designer. 28Health Club and fitness centre. 29Storage or Warehouse keeping 30Commercial training or coaching centre.

31Erection, Commissioning and Installation. 32Internet café. 33Maintenance or repair. 34Technical testing and analysis 35Technical inspection and certification 36Airports authority 37Transport of goods by aircraft 38Business Exhibition. 39Goods Transport Agency. 40Opinion Poll Agency.

41Outdoor Caterer. 42Survey and Exploration of mineral 43Pandal or Shamiana Contractor 44Travel Agents. 45Forward Contract 46Cleaning Services. 47Club or Association 48Packaging 49Transport of goods by rail.

50Stock Exchange 51Forward Contracts 52Processing / Clearing House

Examples Despatch through courier to a foreign destination. Tour operator, covering Pakistan also. Madonna inviting an Indian beautician. Chartered Accountant, auditing the accounts of Britney Spears. Putting up a pandal, along Indo-Nepal boarder, covering a bit of Nepal too.

Category III If provided in relation to business or commerce - the recipient should be located outside India. Otherwise - the recipient should be located outside India, at the time of provision of such service. If the recipient has a presence in India, the order for service must be from outside India.

S.No.Name of the taxable service. 1Telephone. 2Pager. 3General Insurance – Other than immovable property 4Advertising Agency. 5Consulting Engineering. 6Manpower recruitment and supply of manpower. 7Management Consultant. 8Scientist or Technocrat. 9Leased Circuit. 10Telegraph.

11Telex. 12Fax. 13Online information and database access and retrieval. 14Broadcasting. 15Insurance auxiliary Services 16Banking and other financial services. 17Cable Operator. 18Life Insurance. 19Insurance auxiliary services relating to life insurance. 20Business Auxiliary Service.

21Franchisee service. 22Foreign Exchange Broker. 23Intellectual Property Service. 24Programme Producer. 25Transport of goods through pipeline or conduit. 26Survey and map making – Other than those relating to immovable properties. 27Mailing list compilation. 28Registrar to issue. 29Share transfer Agent. 30ATM Operations, maintenance or management.

31Recovery agents. 32Sale of space / time for advt. 33Sponsorship. 34Business Support services. 35Auctioneering – Other than immovable properties. 36Public relations services. 37Ship Management Services. 38Credit card related services.

39Telecommunication. 40Development / Supply of content. 41Asset Management. 42Designing. 43IT Services. 44ULIP.

Examples Consulting engineer, rendering service to a foreign client. Downloading web content, by a foreign national. Soliciting orders for a foreign company. Manpower recruitment for a foreign company. Job work for a foreign principal.

No Service tax needs to be paid on export of Services. (Rule 4 of Export of Service Rules, 2005) If paid, rebate can be claimed. (Rule 5, ibid and Notification 11/2005) Rebate of duties of excise / service tax, suffered on inputs / input services, can be claimed. (Rule 5, ibid and Notification 12/2005) What if services are exported?

Cenvat can be availed for the inputs / input services used for the exported services. (Cenvat Credit Rules, 2004) Refund of unutilized credit. (Rule 5 of CCR, 2004 & Notification 5/2006)