Export of services – Rules amended.
Mining Service, Renting and works contract service are now included in the 1st category of Exporter Services i.e. these services would be treated as export services if they are provided in relation to an immovable properties situated outside India.
Services would be treated as Exports only if two conditions are fulfilled.
I. The Service is provided from India and used outside India;
II. Payment for the service “provided outside India” is received by the service provider in convertible Foreign Exchange.
Please note the difference. Under the 1st condition, the service has to be provided from India and used out side India. But as per the 2nd condition, the payment is for the service provided outside India. This perhaps creates contradictory situation between the two conditions in the sense, the 2nd condition perhaps restricts the scope of 1st condition and requires the service to be provided outside India. This is the problem of using more words than required. It could as well have been condition No.1 with a clause that the payment should be received in Foreign Currency. The words ‘provided outside India’ were not at all required in 2nd condition. The good Board realizes this mistake and has now deleted the words ‘outside India’ in the 2nd condition.
Notification No. , Dated May 22, 2007