Till now only certain services provided to diplomatic mission etc. were exempt under various notifications. With the increase in the scope of service tax, the existence of these old notifications was become redundant virtually.

Realizing the difficulty and problems, central government has withdrawn old notification vide notification no. 35/2007 ST dated 23-5-2007 and issued two new notifications to grant exemption from taxable services provided:

- for the official use of a foreign diplomatic mission or consular post in India (Notification No. 33/2007 ST dated 23-5-2007) and

- for the personal use or for the use of the family members of diplomatic agents or career consular officers posted in a foreign diplomatic mission or consular post in India (Notification No. 34/2007 ST dated 23-5-2007).

These notifications are subject to certain procedures. The procedures prescribed in the two notifications above, have been explained in detail by the Board (CBEC) in its circular no. F. No. 137/17/2007-CX.4 dated 23-5-2007.

The procedures in brief are being narrated below:

• Exemption under the captioned notification will start from the date on which MEA (Ministry of External Affairs) issues a certificate to receive free services and ends with the withdrawal of such certificate.

• Diplomatic Mission shall provide a self certified copy of such certificate and an undertaking (in original) to the service provider.

• Service provider shall mentioned the reference no. of the Undertaking issued by the diplomatic mission (with unique sr. no. of the identity card if provided for personal use)

Diplomatic exemption for services now follows a certificate based procedure requiring mission undertakings and supplier documentation. Exemption from service tax for services to foreign diplomatic missions and for personal or family use of diplomatic personnel depends on an MEA certificate: the exemption commences on issue and ends on withdrawal of that certificate. Diplomatic missions must provide a self-certified copy of the MEA certificate and an original undertaking to the service provider, who must record the undertaking's reference number and any identity card serial number to validate the exemption.