2005 (8) TMI 110 - AAR - Service Tax

Clarification on Taxable Services for Pandal and Shamiana Decoration under Finance Act, 1994

Re. Shri Kartar Singh Kochar

Re. Shri Kartar Singh Kochar - tmi Issues: Classification of services under the Finance Act, 1994; Exemption of pandals and shamianas from service tax; Cartage charge for transportation and service tax credit eligibility.In the judgment by the Authority for Advance Rulings, the applicant sought clarification on the classification of services under the Finance Act, 1994. The first issue revolved around determining the classification under sub-section 105 of section 65 of the Act for the supply of furniture, fixtures, lights, and other items without providing or erecting a pandal or shamiana. The Authority analyzed the definitions of 'pandal or shamiana contractor' and 'pandal or shamiana,' emphasizing that services must be in connection with the preparation, arrangement, or decoration of a pandal or shamiana to fall under the taxable service classification. The ruling clarified that the supply of items connected with sound systems is not covered under the definition of a pandal or shamiana contractor, affecting its classification under the Act.Regarding the second issue, the applicant inquired about the exemption of pandals and shamianas supplied for Hindu marriages from service tax based on a communication dated September 10, 2004. The Authority noted that the communication was an internal memo for field officials and not an exemption notification under the Act. It highlighted that the communication did not qualify as a notification granting exemption and therefore could not be considered under section 96C(2)(d) for an advance ruling. Consequently, the Authority ruled that no advance ruling could be pronounced on the exemption issue based on the communication.During the hearing, the applicant withdrew the third question related to cartage charges for transportation and service tax credit eligibility. As a result, the ruling focused solely on the first two issues raised by the applicant. The comprehensive analysis provided by the Authority clarified the classification criteria for services related to pandals and shamianas under the Finance Act, 1994 and highlighted the limitations of relying on internal communications for exemption determinations. The ruling, delivered by the members of the Authority, provided detailed explanations and legal interpretations to address the issues raised by the applicant effectively.