Business Daily from THE HINDU group of publications
Monday, Jun 26, 2006
Business Daily from THE HINDU group of publications Monday, Jun 26, 2006 |
|
|
|
|
|
|
|
Mentor
-
Taxation Columns - At Your Service Sales on high seas
Ours is an autonomous body funded by the Government of India and we are often offered `high seas sales' terms by the suppliers for the quotations we call for equipment purchases, and so on. We are exempted from Customs and excise duty under special provision. In this case, is it advisable to go for `high seas sales' basis. What documents are required to be submitted to the supplier under this term? Gill M. Singh Service tax law neither recognises the term nor defines it. For trade purposes, `India' has been defined to include designated areas in the continental shelf and exclusive economic zones of India. The services provided outside the limits of Indian territorial waters are not domestic and would be treated as exports or imports, as the case may be. Indian territorial waters extend up to 12 nautical miles from the Indian land mass.
In international law `high seas' means all parts of the sea not included in the territorial sea and internal waters of any state. (Halsbury, 4th edition; para 284) In the case of taxable services being provided to you, it would have to be proved that they are not covered under the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006. Even if these are used or consumed in India or the recipient is located in India, they will be treated as taxable service.
Software development
We have developed a software that is available to users through the Internet. We charge the clients based on the number of users using the software every month. The users neither have to invest in computers (hardware) nor buy expensive software. Employees of the client company access this software through the Net from office, home or cyber cafes. Is service tax applicable for such ASP (application service provider) service? Vikas Deodhar The querist is a software development vendor and provides software application service. In the case of consulting engineers, services in the discipline of computer software engineering are exempt or are not a taxable service. The nature of software development also does not seem to get covered under online information and database access or retrieval as it does not provide data or information access or retrieval to the customer. It may however, be noted that Internet service providers who provide access to Web sites through computer network are covered by service tax under online information service. Similarly, cyber cafes providing access to Internet are covered under service tax. In the case of business auxiliary services, information technology services are excluded, which implies any service in relation to designing or developing of computer software or system networking or any other service primarily in relation to operation of computer system. As such, it also does not fall under business auxiliary service.
Send in your queries to MentorAtYourService@gmail.com Blog at: htpp//MentorQA.blogspot.com
Sanjiv Agarwal
More Stories on : Taxation | At Your Service
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2006, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|