1. advocate & cost accountant
Export of Services by
g. natarajan
advocate & cost accountant
swamy associates

2. Era of simplicity… Notification 2/1999 Dt. 28.02.1999.
Rescinded by Notification 2/2003 Dt
Notification 21/2003 Dt
Rescinded by Notification 10/2005 w.e.f

3. Export of Services Rules, 2005
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

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

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

6. S.No
Name of the taxable service. 1
General Insurance 2
Architect 3
Interior Decorator 4
Real Estate Agent 5
Commercial or industrial Construction service. 6
Site formation, clearance, excavation, earth moving, demolition and other similar services 7
Dredging 8
Survey and map making 9
Construction of residential complex 10
Auctioneering of immovable property.

7. Examples An Indian construction company, building a commercial
complex, in Afghanistan.
An interior decorator, being engaged for beautification
of “White House”.

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

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

10. 11
Cost Accountant 12
Company Secretary 13
Security Agency. 14
Credit Rating Agency 15
Market Research Agency. 16
Underwriter. 17
Photography. 18
Convention. 19
Video Production Agency. 20
Sound Recording.

11. 21
Port (Major Ports & Other Ports) 22
Authorised Service Station. 23
Beauty Parlour 24
Cargo Handling. 25
Dry cleaning 26
Event management 27
Fashion Designer. 28
Health Club and fitness centre. 29
Storage or Warehouse keeping 30
Commercial training or coaching centre.

12. 31
Erection, Commissioning and Installation. 32
Internet café. 33
Maintenance or repair. 34
Technical testing and analysis 35
Technical inspection and certification 36
Airports authority 37
Transport of goods by aircraft 38
Business Exhibition. 39
Goods Transport Agency. 40
Opinion Poll Agency.

13. 41
Outdoor Caterer. 42
Survey and Exploration of mineral 43
Pandal or Shamiana Contractor 44
Travel Agents. 45
Forward Contract 46
Cleaning Services. 47
Club or Association 48
Packaging 49
Transport of goods by rail.

14. 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.

15. 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.

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

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

18. 21
Franchisee service. 22
Foreign Exchange Broker. 23
Intellectual Property Service. 24
Programme Producer. 25
Transport of goods through pipeline or conduit. 26
Survey and map making – Other than those relating to immovable properties. 27
Mailing list compilation. 28
Registrar to issue. 29
Share transfer Agent. 30
ATM Operations, maintenance or management.

19. 31
Recovery agents. 32
Sale of space / time for advt. 33
Sponsorship. 34
Business Support services. 35
Auctioneering – Other than immovable properties. 36
Public relations services. 37
Ship Management Services. 38
Credit card related services.

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

21. What if services are exported?
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)

22. 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)

23. Certain other aspects relating to
Service Tax

24. Penalties under Service Tax.
Section 76. Penalty for delayed payment of
Service Tax.
Which shall not be less than
Rs.200 per day or 2 % p.m. whichever is higher.
Maximum limit – ST payable.

25. Penalties under Service Tax.
Section 77. Penalty for contravention of any provisions
for which no separately penalty is prescribed.
Rs.1000.

26. Penalties under Service Tax.
Section 78. Penalty for suppression of value of
Taxable Service.
Minimum : Equal to Service Tax.
Maximum : Twice the Service Tax.
Waiver under Sec. 80.

27. (effective from 18th April 2006)
No more a friendly levy!
Sections 73 C & 73 D
(effective from 18th April 2006)
Power to attach property, even at SCN Stage.
Publication of names.

28. Section 87 - Draconian Recovery powers.
Deductions from any refunds from the
Customs / Central Excise Departments,
across the country.
Chase the debtors including banks, P.Os, etc !
Beware debtors, if you don’t oblige, you are a defaulter!
(they will chase your debtors too!)
Detention of any movable / immovables,
which “belongs to” or “under the control of” the defaulter.
Mundane Certificate action.

29. Pathway to justice. Show Cause Notice.
Normal Period & Extended period.
Power of adjudication.
Order in Original.
Appellate remedies.
- Appeal by assessee.
- Appeal by department.

30. THANKS