Is central industrial security force fire services exempted from service tax

[CHANDRAMA PRASAD]

CISF wing provided fire fighting services to different organigation of public sector . I want know that fire services are exempted from service tax.

[Rajagopalan Ranganathan]

Sir,

Section 66D of Finance Act, 1994 enumerates the list of service falling under Negative List. It stipulates that-

The negative list shall comprise of the following services, namely:--

(a) services by Government or a local authority excluding the following services to the extent they are not covered elsewhere-

(i) services by the Department of Posts by way of speed post, express parcel post, life insurance and agency services provided to a person other than Government;

(ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;

(iii) transport of goods or passengers; or

(iv) any service other than services covered under clauses (i) to (iii) above, provided to business entities.

66 D (a) (iv) stipulates that "any service other than services covered under clause (i) to (iii) above.

If CISF is considered as Government or a local authority then the services provided by CISF will be covered by the provisions of Negative List and the services are not taxable.

Mega exemption Notification No. 25/2012-ST dated 20.6.2012 as amended does not exempt the services provided by CISF to various public sector undertakings and other business concerns.

Under earlier regime up to 31.3.2009 the service provided by CISF were exempted by way of an ad-hoc exemption order No. 1/1/2011, dated 1-7-2011 issued from F. No. 137/14/2008-CX.4. But thereafter no exemption was granted. From 1.4.2009 the services provided by CISF is taxable. This position continues till today. For getting clarification whether CISF is performing sovereign function is to be clarified by the Government of India. Therefore please take up the issue with Government of India through you administrative Ministry. Since there is no specific mention in the negative list or the exemption Notification, in my opinion, you have to pay service tax if charged by CISF.

[KASTURI SETHI]

CISF is not fully Govt. as per legal status.

[KASTURI SETHI]

I also support the views of Sh.Rangansthan Sir.

AI Summary

Governmental service exemption may not cover CISF fire services, exposing them to service tax unless sovereign status is confirmed. Whether CISF fire-fighting services are exempt hinges on the negative-list exemption for services by Government or a local authority; if CISF is so regarded and the service is not an excluded category it would be exempt. The Mega Exemption Notification does not expressly exempt CISF services to PSUs or business entities, and after the prior ad-hoc exemption ended the services have been treated as taxable. An authoritative government clarification on CISF's sovereign status is required; absent that, such services are liable to service tax when charged.