Indian Service Tax
Outside Territorial Waters Of India
Cir. No. 36/4/2001
Date: 08/10/2001
Sub:- Service Tax - Services provided outside the limits of Indian territorial waters not liable to tax
I am directed to say that question has arisen whether services provided outside the limits of the Indian territorial waters are liable to Service Tax or not. The matter has been examined. At present the levy of service tax extends to the whole of India except the State of Jammu and Kashmir. The expression "India" includes the territorial waters of India. Indian territorial waters extend up to twelve nautical miles from the Indian land mass. Chapter V of the Finance Act which governs the levy of Service Tax has not extended to the levy to designated areas in the Continental Shelf and the Exclusive Economic Zone of India (as has been done in case of Central Excise vide Notification No. 166/87C.E., dated 11/6/87 and in case of Customs by Notification Nos. 1l/87-Cus., Dated 14/1/87 & 64/97-Cus., dated 1/12/97). It is, therefore, clarified that the services provided beyond the territorial waters of India are not liable to Service Tax as provisions of Service tax have not been extended to such areas so far.
Notification No.1I2002-ST, dated 1/3/2002
Services rendered outside Indian Territorial waters are included.
In exercise of the powers conferred by clause (a) of sub-section (6) of Section 6, and clause (a) of sub-section (7) of Section 7, of the Territorial Waters, Continental Shelf; Exclusive Economic Zone and Other Maritime Zones Act, 1976 (80 of 1976), the Central Government hereby extends the provisions of Chapter V of the Finance Act, 1994 (32 of 1994) to the designated areas in the Continental Shelf and Exclusive Economic Zone of India as declared by the Notifications of the Government of India in the Ministry of External Affairs Nos. S.O. 429 (E), dated the 18th July, 1986 and S.O. 643(E), dated the 19th September, 1996 with immediate effect.
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