TaxTMI 
TaxTMI 
SERVICE TAX ON GRANT RECD FROM GOVT
20 Jul 2010 
2 Replies 
1572 Views Asked by
Service tax applicability on grants for government sponsored training depends on the nature of services provided.
Service tax applicability on government grants to execute a ministry project depends on whether the recipient provides taxable services or merely incurs reimbursable expenses on the ministry's behalf; non commercial government activities are broadly tax free, but a conclusive view requires specific facts about the contractual role and the nature of training, recruitment and outsourcing services funded by the grant. (AI Summary)
Service tax applicability on government grants to execute a ministry project depends on whether the recipient provides taxable services or merely incurs reimbursable expenses on the ministry's behalf; non commercial government activities are broadly tax free, but a conclusive view requires specific facts about the contractual role and the nature of training, recruitment and outsourcing services funded by the grant. (AI Summary)
We wish to know the service tax applicability as service provider against the grant received from Ministry of Govt of India for incurring the expenses related to the project on their behalf. Please clarify whether the service tax would be applicable on the said grant received or not as service provider. Please support your comments with the relevent section & law defining the same.