Definition of Service

[Admin TMI]

Question - What are proposed change in definition of service in Finance Bill 2015 ?

[Admin TMI]

The intention in law has been to levy Service Tax on the services provided by:

(i) chit fund foremen by way of conducting a chit.

(ii) distributors or selling agents of lottery, as appointed or authorized by the organizing state for promoting, marketing, distributing, selling, or assisting the state in any other way for organizing and conducting a lottery.

However, Courts have taken a contrary view in some cases, while in some cases the levy has been upheld.

An Explanation is being inserted in the definition of “service” to specifically state the intention of the legislature to levy service tax on activities undertaken by chit fund foremen in relation to chit, and distributors or selling agents of lottery in relation to lotteries.

AI Summary

Definition of service: Finance Bill clarifies service tax applies to chit fund foremen and lottery distributors. An Explanation is being inserted into the definition of 'service' to clarify that activities by chit fund foremen in conducting a chit, and by distributors or selling agents of a lottery in promoting, marketing, distributing, selling, or assisting the organizing state, are intended to be treated as taxable services for service tax purposes, addressing prior inconsistent judicial views.