Classification of New Taxable Services for Export/Import Rules
THE Export of Services Rules, 2005 and Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 classifies all the taxable services notified in sub-section 105 of section 65 of the Finance Act, 1994 into three categories in terms of sub-rule (1) of Rule 3 in the said rules for the purpose of determining whether the said services were exported or imported as the case may be, by the service provider/service recipient.
Through Finance Act, 2010, eight new taxable services were brought into the tax net with effect from July 1, 2010. However, there was no indication about their classification for the purpose of export/import of these services. With the result, the service tax payers raised doubts about determining the export/import of the new services as they have not been notified under the respective categories of services enlisted in the relevant provisions of the said rules.
In this regard, Board has clarified that all the new services notified through the Finance Act, 2010 falls in category (iii) of Rule 3(1) of the said rules i.e. residual category, no separate notifications were issued regarding individual classification of the new services.
CIRCULAR NO. , Dated: September 21, 2010