Rule 14 – Order of application of rules :

Rule 14 of the said rules provide that notwithstanding anything stated in any rule, where the provision of a service is, prima facie, determinable in terms of more than one rule , it shall be determined in accordance with the rule that occurs later among the rules that merit equal consideration. Hence, in case where the nature of a service, or the business activities of the service provider, may be such that two or more rules may appear equally applicable, later rule would prevail.

For instance, an architect based in Mumbai provides his service to an Indian Hotel Chain (which has business establishment in New Delhi) for its newly acquired property in Dubai. If Rule 5 (Property rule) were to be applied, the place of provision would be the location of the property i.e. Dubai (outside the taxable territory). With this result, the service would not be taxable in India. Whereas, by application of Rule 8, since both the provider and the receiver are located in taxable territory, the place of provision would be the location of the service receiver i.e. New Delhi. Place of provision being in the taxable territory, the service would be taxable in India. By application of Rule 14, the later of the Rules i.e. Rule 8 would be applied to determine the place of provision.