Service tax on library fee, hostel fee

[Guest]

my client runs a coaching institute. he is charging service tax on the tuition fee only. during the recent audit by excise department,it has been instructed that service tax should also be charged on library fee, hostel fee. pl. explain the correct position.

[Guest]

As per the provisions, when service is taxable, tax is applicable on gross amount charged irrespective of the head of charges, unless such charges are specifically excluded under the provisions. Thus, in respect of your case, the audit is right in demanding tax on other charges as there is no exclusion is available under the 'commercial coaching service'

AI Summary

Taxable service gross amount includes ancillary charges, so library and hostel fees fall within taxable coaching service scope. When a service is taxable, the tax base is the gross amount charged irrespective of fee headings; separately stated charges like library and hostel fees are part of the consideration and, absent a specific statutory exclusion, are taxable under commercial coaching service.