Service or Purchase

[Ganeshan Kalyani]

Dear Sir,

Subscribing for a monthly magazine for 2 years is a purchase or availing service. The supplier of magazine is providing the bookings as per subscription which includes cost of magazine and some charges. I understand it is a purchase rather than a service. Kindly put a line with your view on this matter.

regards,

ganeshan

[Mahir S]

The basic activity undertaken above is sale and purchase of magazines which falls under the category of goods, thus falling under sub section (ii) of section 65 (B) (44) of Finance Act, 1944 - "category of deliver or supply of any goods for sale". hence such activity cannot be termed as "Service" and therefore no service tax applicable thereon.

 

AI Summary

Sale of goods: magazine subscriptions treated as supply of goods, not subject to service tax under the statutory definition.
Subscription to a monthly magazine is characterised as the sale and purchase of goods rather than an availing of service; the supply of magazines under subscription falls within the statutory category of delivery or supply of goods for sale and therefore is not subject to service tax.