There are many who provide services of this nature wherein the ultimate recipient of the services resides outside India. This typically happens in the case of the foreign suppliers who were trading their good in the Indian territory and paying the commission to the Indian agents for the promoting their material to the Indian buyers. This notification has now changed the pointer to the provider for services instead of the recipient of the services for this purpose. This makes all indenting agents of this nature (which were previously outside the preview) liable to pay service tax w.e.f. 1st Oct 2014.
Changes
in Place of Provision of Services Rules, 2012 (“The POP
Rules”) Vide NotificationNo. 14/2014-ST Dated 11-7-2014 (Effective From 1-10-2014):-
Definition
of ‘Intermediary’ has been amended to include intermediary of
goods in its scope. Accordingly, an intermediary of goods, such as a
commission agent or consignment agent shall be covered under Rule
9(c) of the POP Rules instead of Rule 3 of the POP Rules.
Let us
analyse above.
Rule 9(c
) of Place of Provision of Service
Rule 9 :
Place of provision in respect o following services shall be the
location of the service provider:
(C )
Intermediary Services;
INTERMEDIARY
SERVICES
Let us
analyse Intermediary Service Pre and Post 01.10.2014.
“Intermediary”
means a broker, an agent or any other person, by whatever name
called, who arranges or facilitates a provision of service between
two or more persons, but does not include a person who provides the
main service on his account.”
WEF
01.10.2014 Intermediary Means as under.
“Intermediary”
means a broker, an agent or any other person, by whatever name
called, who arranges or facilitates a provision of service or
a supply of goods
between two or more persons, but does not include a person who
provides the main service or
supplies the goods
on his account.”
Please
mark words written in bold. It is evident that the service of
intermediary facilitating supply of goods also be considered
intermediary service wef 01.10.2014. Hence Location of service
provider will be the place of provision of service.
