Services covered under performance related services :
Maintenance and repair service provided within territorial waters to marine vessels owned by foreign companies is not export of service even if payment is received in foreign exchange. This would so even if the service provider is located within SEZ – V V Kay Marine P Ltd. v. CCE (2014) 43 GST 348 = 41343 (CESTAT).
Maintenance or repair service provided in India in respect of products of a foreign company is not export of service as service is provided in India and delivered in India – prima facie view in FANUC India v. CCE (2011) 30 STT 168 = 8270 (CESTAT).
Departmental clarification – CBE&C’s ‘Taxation of Services : An Education Guide’ published on 20-6- 2012 clarifies as follows –
Para 5.4-1 What are the services that are provided “in respect of goods that are made physically available, by the receiver to the service provider, in order to provide the service”? Services that are related to goods, and which require such goods to be made available to the service provider so that the service can be rendered, are covered here. Examples of such services are repair, reconditioning, or any other work on goods (not amounting to manufacture), storage and warehousing, courier service, cargo handling service (loading, unloading, packing or unpacking of cargo), technical
testing/inspection/certification/analysis of goods, dry cleaning etc. It will not cover services where the supply of goods by the receiver is not material to the rendering of the service e.g. where a consultancy report commissioned by a person is given on a pen drive belonging to the customer. Similarly, provision of a market research service to a manufacturing firm for a consumer product (say, a new detergent) will not fall in this category, even if the market research firm is given say, 1000 nos. of 1 kilogram packets of the product by the manufacturer, to carry for door-to-door surveys.
Para 5.4-2 What is the implication of the proviso?
The proviso to states as follows :-
“Provided further that where such services are provided from a remote location by way of electronic means, the place of provision shall be the location where goods are situated at the time of provision of service.”
In the field of Information Technology, it is not uncommon to provide services in relation to tangible goods located distantly from a remote location. Thus the actual place of performance of the service could be quite different from the actual location of the tangible goods. This proviso requires that the place of provision shall be the actual location of the goods and not the place of performance, which in normal situations is one and the same.