Is service tax leviable on services received from outside India?
Prior to introduction of Finance Act, 2006, explanation to Section 65(105) of the Finance Act, 1994 (inserted vide Finance Act, 2005) levied service tax on taxable services rendered by a service provider residing outside India (ie having a business/ fixed establishment from where service is provided/ permanent address/ place of residence outside India) to a person based in India. Under the Finance Act, 2006 a new Section 66A has been introduced. This Section provides for levy of service tax on the services rendered by a service provider residing outside India to a person based in India. Further, in such cases, it is deemed that the service recipient in India has himself provided the taxable service in India and, accordingly, service tax is payable by the service recipient. In addition to Section 66A, Taxation of Services (Provided from Outside India and received in India) Rules, 2006 have been notified which lay down the criteria (similar to Export of Services Rules) based on which a s
