Scope of Auxiliary Services before April 30, 2006

[Jignesh Shah]

Was an individual covered under Business Auxiliary Services before April 30,2006? Friends, can I get a definite Yes or No with reasons? For Service Provider covered under Business Auxiliary Services, the term used (till the end of April 30, 2006) was 'Commercial Concern' and not 'any person', which means an individual was outside the Service Tax net at all under that title even after putting a business title. Does it mean that a sole proprietorship even if it us running its business in the name of say 'Excellent Services' was not liable to pay service tax under Business Auxiliary Services before April 30,2006? As it is a key question, can I expect a definite answer to this? Thanks.

[Rama Krishana]

If you by the circulars and amendments made by the legislature in the service tax provisions, The individual was not liable to service tax under BAS before substitution of "any person" in place of "commercial concern". But the situation may be different in case of proprietorship concern. How a person say that a proprietorship concern is not a commercial concern. But you may some cases on this issue (i) 2008 TMI - 30575 - CESTAT, NEW DELHI and (ii) 2009 TMI - 32716 - CESTAT, NEW DELHI

[Jignesh Shah]

Thank You Mr. Rama Krishana. In my view, an individual does not become a commercial concern just by putting business name. The classification is not according to name, trade, turnover etc. An individual remains an individual even after putting the business name which is used for easy reference. Does it depend on how the case is presented and which all judgements we have relied on in presenting the case? Need an opinion on the same.

AI Summary

Debate on Individual Liability for Service Tax under BAS Before 2006: Were Sole Proprietorships Considered Commercial Concerns? A discussion on whether individuals were liable for service tax under Business Auxiliary Services (BAS) before April 30, 2006, highlights that the term 'commercial concern' was used instead of 'any person,' suggesting individuals were not covered. A participant questions if sole proprietorships, despite having business names, were exempt. A reply notes that individuals were not liable under BAS before the term change, but proprietorships might be considered commercial concerns. Another contributor argues that merely adopting a business name does not transform an individual into a commercial concern, suggesting that legal interpretations and judgments influence outcomes.