TaxTMI 
TaxTMI 
Draft Circular - Clarification on technical issues relating to scope and classification of taxable services, levy of service tax and valuation of taxable services – reg
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....since the introduction of service tax on matters relating to service tax in various forms by different authorities keeping in view the changes that had taken place in the statutory provisions, the judicial pronouncements and other relevant factors and appointed a Committee under Shri T.R.Rustagi, former Chief Commissioner of Customs & Central Excise and Director General of Inspection to undertake the review of clarifications. 3. Comments, views and suggestions were also sought from the trade and industry associations, departmental officers and interested persons. 4. Shri T.R.Rustagi submitted his report to the Government and suggested to withdraw all the clarifications and codify the clarifications into two circulars - one relating to technical issues and the other relating to procedural issues. The report of Shri T.R.Rustagi has been placed on the CBEC web site for comments and suggestions. 5. Taking into consideration the report submitted by Shri T.R.Rustagi, views and suggestions received from the trade and industry associations, departmental officers and other stakeholders, it is proposed to codify and issue a comprehensive circular on technical issues. A separate circular w....
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....t of the value of taxable service under section 67 read with Service Tax (Determination of Value) Rules, 2006. 004.01/01.07.07 Persons/agencies canvass advertisements for publishing, on commission basis. Such persons / agencies do not provide any other services like making, preparation, display or exhibition of advertisement. Whether merely canvassing advertisement for publishing on a commission basis by persons / agencies is classifiable as Advertising Agency service [section 65(105)(e)] or not. Merely canvassing advertisements for publishing, on commission basis, is not classifiable under the taxable service falling under section 65(105)(e). Such services are leviable to service tax under business auxiliary service [section 65(105)(zzb)]. 005.01/01.07.07 Some transporters undertake door- to-door transportation of goods or articles and they have made special arrangements for speedy transportation and timely delivery of such goods or articles. Such services are known as 'Express Cargo Service' with assurance of timely delivery. Whether such 'Express cargo service' is covered under courier agency service [section 65(105)(f)]. The nature of service provided by 'Express Carg....
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....tures, light fittings and floor coverings therein let out for a consideration for organizing any official, social or business function. [section 65(66)] "Mandap keeper" is defined as a person who allows temporary occupation of a mandap for a consideration for organising any official, social or business function [section 65(67)]. Whether hotels / restaurants letting out their halls, rooms etc. for social, official or business functions fall within the definition of "mandap" and allowing temporary occupation of halls, rooms etc by such hotels / restaurants for organizing any official, social or business function is leviable to service tax under "mandap keeper service" [section 65(105)(m)]. Halls, rooms etc. let out by hotels / restaurants for a consideration for organising social, official or business functions are covered within the scope of "mandap" [section 65(66)], and such hotels and restaurants are covered within the scope of "mandap keeper" [section 65(67)]. Accordingly, service tax is leviable on services provided by hotels and restaurants in relation to letting out of halls, rooms, etc. for organizing any official, social or business function under mandap keeper service ....
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....separately charging any amount as commission or brokerage does not fall within the scope of foreign exchange broking and is not leviable to service tax under section 65(105)(zm). 034.02/01.07.07 'Asset management and all other forms of fund management' are leviable to service tax under 'banking and other financial service' [section 65(12)]. Whether the amount charged as 'entry and exit load' from the investor by a mutual fund is leviable to service tax as asset / fund management services under banking and other financial services [section 65(105)(zm)]. Entry load and exit load charged by a mutual fund are not for the purpose of management of assets. Thus, amount charged as "entry and exit load" are not to be treated as consideration received by Asset Management Company for asset management and hence not be leviable to service tax under banking and other financial service [section 65(105)(zm)]. 034.03/01.07.07 Whether depository services and Electronic Access to Securities Information (EASI) services provided by Central Depository Services (India) Ltd., (CDSL) is leviable to service tax under Banking and other Financial Services[section 65(105)(zm)]. Definition of "Banking ....
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.... by the vehicle manufacturers) are leviable to service tax under authorised service station service [section 65(105) (zo)]. In this case, service is provided by an authorised service station to a customer and the service provider receives the consideration for the services provided. Service tax is leviable on the amount received from the vehicle manufacturer for the purpose of servicing of vehicles. 036.02/01.07.07 Whether servicing/repair of heavy vehicles like trucks by authorized service station is leviable to service tax under section 65(105)(zo). Service tax is leviable on services provided by an authorised service station to a customer in relation to service, repair, reconditioning or restoration of motorcars, light motor vehicles or two-wheeled motor vehicles [section 65(105)(zo)]. Thus, servicing of heavy vehicles like trucks, not being one of the specified categories of motor vehicles, is not covered within the scope of the said taxable service. 036.03/01.07.07 Whether spare parts sold by a service station during the servicing of vehicles is liable to payment of service tax. Whether exemption can be claimed on the cost of consumables that get consumed during the....
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....or any other amount, to its members, but does not include such person or body of persons engaged in any activity having objectives which are of a charitable nature. Whether a club or association enjoying exemption under the provisions of Income Tax Act as a public charitable institution gets automatically excluded from levy of service tax under section 65(105)(zzze) read with section 65(25a) of the Finance Act, 1994. Exemption under the Income Tax Act on the ground of being a public charitable institution is of no consequence or relevance for service tax purposes. Levy of service tax is entirely governed by the provisions contained in the Finance Act, 1994 and the rules made there under. "Charity" is defined as "aid given to the poor, the suffering or the general community for religious, educational, economic, public safety, or medical purposes", and "charitable" is defined as "dedicated to a general public purpose, usually for the benefit of needy people who cannot pay for the benefits received" [Black's Law Dictionary]. Whether a club or association are engaged in activity having objectives, which are of a charitable nature, or not is to be determined purely on the basis of ....
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.... Whether ticket issued outside India for an international journey commencing from India (say Delhi-London) is leviable to service tax. Service tax is payable by the service provider, namely aircraft operator, for the taxable service provided. Place of purchase/ issue of ticket is of no relevance or consequence to determine the levy of service tax under section 65(105)(zzzo) read with section 66. Service tax is leviable as long as the passenger embarks in India for international journey, in any class other than economy class. 999.01/01.07.07 Sovereign/public authorities perform functions assigned to them under the law in force, known as "statutory functions". For example, · Regional Reference Standards Laboratories (RRSL) undertake verification, approval and calibration of weighing and measuring instruments; · Regional Transport Officers (RTO) issue fitness certificate to motor vehicles; · Directorate of Boilers inspects and issues certificates for boilers; or · Explosive Department inspects and issues certificate for petroleum storage tank, LPG/CNG tank in terms of provisions of the relevant laws. Authorities providing such functions, required....
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....), Agency or intermediary services on commission basis (distribution of mutual funds, bonds, passport applications, collection of telephone and electricity bills) fall under the category of services where Department of Posts is in competition with other similar service providers. Such category of services are liable to service tax under appropriate taxable services. (G.G.Pai) Under Secretary (Tax Research Unit) ANNEXURE I Three digit Code Taxable Service / Others 001 Stock broker [Section (105)(a)] 002 Telecom Service [Section (105)(zzzx)] 003 General insurance [Section (105)(d)] 004 Advertising agency [Section (105)(e)] 005 Courier agency [Section (105)(f)] 006 Consulting engineer [Section (105)(g)] 007 Custom house agent [Section (105)(h)] 008 Steamer agent [Section (105)(i)] 009 Clearing and forwarding agent [Section (105)(j)] 010 Manpower recruitment agent [Section (105)(k)] 011 Air travel agent [Section (105)(l)] 012 Mandap keeper [Section (105)(m)] 013 Tour operator [Section (105)(n)] 014 Rent-a-cab scheme operator [Section (105)(o)] 015 Architect [Section (105)(p)] 016 Interior decorator [Section (105)(q)] 017 Manag....
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....3 Intellectual property [Section (105)(zzr)] 064 Opinion poll [Section (105)(zzs)] 065 Outdoor caterer [Section (105)(zzt)] 066 Programme producer [Section (105)(zzu)] 067 Survey and exploration of mineral [Section (105)(zzv)] 068 Pandal or shamiana [Section (105)(zzw)] 069 Travel agent [Section (105)(zzx)] 070 Forward contract [Section (105)(zzy)] 071 Transport of goods other than water through pipeline or other conduit [Section (105)(zzz)] 072 Site formation and clearance, excavation and earthmoving and demolition and such other activities [Section (105)(zzza)] 073 Dredging [Section (105)(zzzb)] 074 Survey and map-making [Section (105)(zzzc)] 075 Cleaning activity [Section (105)(zzzd)] 076 Club or association [Section (105)(zzze)] 077 Packaging activity [Section (105)(zzzf)] 078 Mailing list compilation and mailing [Section (105)(zzzg)] 079 Construction of complex [Section (105)(zzzh)] 080 Registrar to an issue [Section (105)(zzzi)] 081 Share transfer agent [Section (105)(zzzj)] 082 Automated teller machine operations, maintenance or management [Section (105)(zzzk)] 083 Recovery agent [Section (105)(zzzl)] 084 Sale ....