Applicability of service tax to the state of Jammu and Kashmir

Service tax or ST is applicable to the whole of India except the state of Jammu and Kashmir or J&K. To get it applicable to the state of Jammu and Kashmir the consent of the state assembly is required which has not been obtained till date.

Followings are some of the incidence which needs to be examined in detail to know the impact of service tax on the state of J&K;

  1. Mr. X (Service provider) is from the state of J&k where as Mr. Y (receiver) is not.
  2. Mr. X and Mr. Y are from J&K.
  3. Mr. Y is from J&K where as Mr. X is from outside J&K.

To answer all these questions we have to remember that service tax will not be chargeable if it’s consumed in Jammu and Kashmir. This means. if its consumed in India but outside of Jammu and Kashmir then it will be charged to service tax.

In the first case, Mr. X is based out of J&K but Mr. Y is from outside J&K. In this case services are rendered outside Jammu and Kashmir (i.e. at the place of receiver) so tax will be chargeable on these types of transactions.

In the second case, both provider (Mr X) and receiver (Mr Y) are in Jammu and Kashmir so nothing will be chargeable to service tax.

In the third case its consumed in Jammu and Kashmir even though the provider (Mr X) is from outside the state of Jammu and Kashmir. In this case, service tax will not be charged as it is provided and consumed in J&K.

So to conclude, service tax will be charged if such services are consumed in Jammu and Kashmir. It does not matter where the offices of the provider or receivers are. These offices can be outside J&K but if it is consumed in the state of J&K then it will not be applicable.

This means Mr X can be from delhi, chennai, kolkata, mumbai or any other parts of India but to charge service tax we need to find out whether the receiver has consumed it in Jammu and Kashmir (J&K) or not. If its consumed in J&K then no Service Tax.

15 thoughts on “Applicability of service tax to the state of Jammu and Kashmir

  1. a l haq

    I am a resident of J&K and have been outsourced a service by the vender who is residing outside J&K. the vendor got the contract from the J&K Govt. the govt deducted the service tax @10.5% from the vendor but the vendor also deducted service tax from me. q.1. is service tax applicable in J&KQ 2. Has a state subjectee liable for service taxQ 3. can service tax be deducted at 2 times . is it not the double texation.Q 4. then what is the rate of service tax in J&K

    Reply
  2. Anand Mehra

    Hi Expert,

    If the service provider from jammu and service receiver from mumbai and place of service is jammu so in that case what is the service tax applicability if yes so who is the liable to pay service tax service provider or services receiver.., Thanks

    Regards,
    Anand
    09592249701

    Reply
    1. YFB

      As explained by you, it seems like service has been consumed in J&K. Like we discussed above if service is consumed in J&K then no service tax.

      Reply
  3. Aadil Altaf

    I am from J & K. I have to make an aggrement with a company outside J & K for my website. They Are asking me to register for service tax but i cannot apply for it. Is there a solution for my problem

    Reply
    1. YFB

      who will render service.. please clarify.. registration will be required only when turnover exceed Rs 900000. Please let us know your gross receipts or turnover per year.

      Reply
  4. Aadil Altaf

    I will render the service of online appointment with doctors in kashmir on my website. The company i am trying to make an agreement with is for online payment through mobile carrier billing. they told me to apply for service tax (ST-1) and get a copy of ST-2. but as i tried the site on aces.gov.in displayed that Service Tax provisions under Finance Act 1994 extends to the whole of India except the State of JAMMU & KASHMIR. Now they are saying that without service tax registration they cannot complete the agreement. and i cannot apply for service tax. can you give me a solution.

    Reply
  5. Samir Shah

    Hi,

    Our company is registered and based out in J&K. I am interested in buying Online Database retrieval Service from say Naukri or Timesjobs who are from outside J&K. is service Tax applicable to me as I fall under Serial 3 of the above Article. The service is online in nature but billed to J&K based company from outside J&K company. Am I liable for Service Tax. Please clarify.

    Samir

    Reply
    1. YFB

      From your website it seems like you are a Bangalore based company. Will this services be rendered to your branch office in J&K?

      Reply
  6. VISHAL SHARMA

    Company X has awarded construction work in J&K and registered under Service tax act.Company Y is providing the Consultancy services to Company X from there registered office Noida.In that case is Company Y is liable to charge service tax to Company X.
    What will be the situation if billing is being done by Company Y office at Noida.

    Reply
  7. krishan

    Dear Team,
    Please confirm me current services tax in a J & K. our company is outsourcing co. we providing a manpower to banks

    Reply
  8. praful muju

    Sir,
    I am resident of Jammu Kashmir living in jammu kashmir
    Is service tax applicable on me if i use services like Dist tv recharge or any other online services with indiamart etc ?

    Reply
  9. Gopal Dass

    Our company is Delhi based and doing construction work in J&K state and receiving consultancy charges, whether service tax on consultancy charges is applicable in J&K state.

    Reply
  10. Hitesh

    Hi
    I got my car serviced from a branded auto company service station in Jammu. I stay in Jammu only. Service provider has charged 12.6% service tax from me on the labor amount.

    Kindly share if it is genuine on their part to charge it? I heard there is no service tax applicability in J&K.

    Reply
  11. PREM

    Dear Experts / Masters
    I am from Kolkata and providing consulting services to a company in New Delhi who has got a Tender for construction in Jammu & Kashmir. I am basiclly doing consulting for Delhi and Japanese company. Do i have to pay the service tax on the consulting services. What i have read on this forum that services given in J&K will not pay service tax.

    Thanks
    Prem

    Reply
  12. Ravinder Kumar Verma

    Our company is in Gurgaon (Haryana) state based and doing construction work in J&K state and receiving consultancy charges.Whether service tax on consultancy charges is applicable in J&K state.Will you inform how much client will deduct from our payments (ECS) like TDS,any other taxes etc.etc.Our client is M/s Ircon International Ltd ,based at Delhi.

    Reply

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