Circular MF(DR)F No 233/2/2003-CX

[K Balasubramanian]

Please provide me a copy of Circular MF(DR) F No 233/2/2003-CX dated 03/03/2006

[K Balasubramanian]

Circular Service tax Clarification regarding service tax on Photography services Circular M.F. (D.R.) Letter F. No. 233/2/2003-CX-4, dated 3-3-2006 The undersigned is directed to state that Notification No. 12/2003-S.T., dated 20-6-2003, exempts the value of goods and material sold by the service provider to the recipient of serv­ice, during the course of providing service, subject to the condi­tion that there is documentary evidence indicating the value of the goods and materials. 2. On certain representation from Punjab Color Lab Association, Jalandhar, a letter was issued by Deputy Secretary (CX.-4), dated 7th April, 2004 clarifying that the exemption is available if the service provider maintains the records showing material consumed/sold while providing the taxable service. After issuance of the said letter various references were received from field formations and photographic associations seeking clarification whether the value of materials consumed during the provision of service by the service provider for rendering the service is also excludable from the value of taxable service. 3. The matter has been examined by the Board. The intention of the Notification No. 12/2003-S.T., dated 20-6-2003 is to provide exemption only to the value of goods and material sold subject to documentary evidence of such sale being available. Therefore, in case, the goods are consumed during the provision of service and are not available for sale, the provision of the said notifica­tion would not be applicable. Therefore, in supercession of clarification to contrary, it is clarified that goods consumed during the provision of service, that are not available for sale, by the service provider would not be entitled to benefit under Notification No. 12/2003-S.T., dated 20-6-2003.

[Madhukar N Hiregange]

Circulars are available on this site itslef. Alternatively cbec.gov.in

[Surender Gupta]

You can find this circular on the following link: https://www.taxtmi.com/circulars?id=720

AI Summary

Exclusion of sold goods from service tax valuation requires documentary proof; consumed materials are not excludable. The Notification exempts from service tax valuation the value of goods and materials sold by a service provider during provision of a taxable service when supported by documentary evidence; goods consumed in the course of providing the service and not available for sale are not eligible for exclusion, and this clarification supersedes earlier contrary advice.