TaxTMI 
TaxTMI 
Imposition of Service Tax on new services consequent to enactment of Finance Bill, 2003-reg.
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....vered under the tax net in case of,- o port services (which were earlier limited to major ports) to cover all ports under the service tax net; o authorised automobile service was brought under the tax net with effect from 16.7.2001. However, it was restricted only to motorcars and two wheeled motor vehicles. ^1Light motor vehicles like maxi cabs etc. were not covered. Provision have been made to widen the scope of authorized automobile service to cover all such vehicles; o foreign exchange broking service provided by any body corporate or non-banking financial company was covered under the tax net in the category of banking and other financial service with effect from 16.7.2001. Provisions have been made to extend the scope of the tax to include the service provided by all foreign exchange brokers (including moneychangers and forex dealers). As per the provisions of the Finance Act, the above levies or extensions of levies are to come into effect from a date to be appointed by the Central government. In this regard, vide notification No.7/2003-Se....
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....sed in case of business auxiliary services. In this regard the following is clarified,- * While it is not possible to give an exhaustive list of business auxiliary services, the following are illustrations of services that are covered under this category viz. evaluation of prospective customers, processing of purchase orders, customer management, information and tracking of delivery schedules, accounting and processing of transactions, operational assistance for marketing, formulation of customer service and pricing policies, managing distribution & logistics. The services provided in relation to getting a customer, verification of prospective customer, processing of purchase order etc would also be covered under service tax, as the law specifically provides for inclusion of such services as business auxiliary support services. * As regards the question whether insurance agents, C&F agents working on commission basis fall under the definition of business auxiliary service, it is clarified that they do not, as they are specifically covered within the definition of other specified taxable services, namely the Insurance service and C&F Service respectively.....
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....nations and competitive exams like entrance examinations for Indian Institute of Technology-Joint Entrance Examinations/Pre Medical Tests, Civil Services exams etc. are chargeable to service tax. However, services in relation to commercial coaching and training, provided by, - a. vocational training institute; b. computer training institute; and c. recreational training institute; have been exempted from service tax w.e.f. 1^st July, 2003vide Notification No.9/2003-Servtice Tax dated 20^th June 2003. Therefore, vocational coaching and training services provided by typing and shorthand institutes, TV/ vehicle repair training institutes, tailoring institutes, industrial training institutes, foreign language institutes, computer-training centers, hobby classes, institutes teaching martial arts, painting, dancing etc would not be chargeable to service tax. This exemption would remain in force upto 29^th February 2004. 2.2.2 Institutes like the Institute of Chartered Accountants of India some time hire the services of other institutes to impart some part of training (like language or computer training) to the students undertaking courses for obtaining....
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....e, only those service providers are covered under the service tax who have some establishment for providing commercial coaching or training i.e. institutional coaching or training. Thus, individuals providing services at the premises of a service receiver would not be covered under service tax. However, if coaching or training center provides commercial coaching by sending individuals to the premises of service receivers, such services would be chargeable to tax, as in this case, the individuals are rendering services on behalf of an institution. * Whether free summer training/ in house training provided by employers to their employees are covered under service tax net: It is clarified that in case employers provide any free training themselves, no service tax is chargeable. However if an employer hires an outside commercial coaching or training center for imparting some training to its employees, then the payment made by the said employer to such coaching center will be chargeable to service tax. 2.3 MAINTENANCE AND REPAIR SERVICES: 2.3.1 Maintenance contracts entered into before 1^st July 2003: There are cases where maintenance contracts are entered into fo....
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....ship of all know how to franchisee; (iii) the franchisee is required to pay to the franchisor, directly or indirectly, a fee; and (iv) the franchisee is under an obligation not to engage in selling or providing similar goods or services or process, identified with any other person. For example, the mere fact that a principal manufacturer has allowed production of goods bearing his brand name by another person under 'License Production Agreement`, does not make the agreement a Franchise Agreement. A franchise agreement also includes the franchisee being obliged to follow the concept of business operation, managerial expertise, market techniques etc. of the franchisor and is under an obligation not to engage in selling, producing or providing similar goods or services, identified with any other person. Therefore, in the absence of such ingredients, a mere licensed production cannot be called as a franchise agreement and accordingly the license fees paid for such license production cannot be charged to service tax. 2.5 TECHNICAL INSPECTION AND CERTIFICATION SERVICES: A doubt has been raised whether certification given in respect of immovable property should fall under t....
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.... ON TELEPHONES: In regard to credit of service tax on telephone connection, queries have been raised as to whether service tax credit would be admissible on telephone sets installed only in the business premises. The answer is in the affirmative, and credit will be allowed only on telephone sets installed in the business premises. Mobile phones are not covered. 2.9 MISCELLANEOUS ISSUES: 2.9.1 In case of authorized service stations, maintenance or repair services, commissioning and installation services and photography services it has been provided in the law that the cost of goods and material shall not form part of the value to be subjected to service tax, if evidence (like sale invoice/bill) shows that these goods were sold. Such dispensation has, however, not been provided for other services like commercial coaching and training centers, telecom services. In this regard, a general exemption under Notification No. 12/2003-service Tax, dated 20^th June, 2003 has been issued exempting that part of the value of all taxable services from service tax, which represents the cost of goods or material sold by the service provider to the receiver of such services during the course....