Classification - Principles of Interpretation of Specified Description of Services or Bundled Services

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....d vide Finance Act, 2012 w.e.f. 1.7.2012 for the Principles of Interpretation of Specified Descriptions of Services or Bundled Services. . Input service and output service may not be same (1) Unless otherwise specified, reference to a service (herein referred to as main service) shall not include reference to a service which is used for providing main service. [Illustration - The services by the Reserve Bank of India, being the main service within the meaning of clause (b) of section 66D, does not include any agency service provided or agreed to be provided by any bank to the Reserve Bank of India. Such agency service, being input service, used by the Reserve Bank of India for providing the main service, for which the consideration by wa....

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.... Also explained by CBEC , no single formula can be formulated whether a service is naturally bundled in the ordinary course of business or not. Each case has to be individually examined. As per various judgements, principles for determination of essential characteristic of a product have: -Cost of components of the product (refer case Xerox India Ltd. vs CC 2010 (11) TMI 20 - Supreme Court of India) -Functionality of the product. (refer case CCE, Hyderabad v. Bakelite Hylam Ltd. 1997 (3) TMI 598 - SUPREME COURT) ========== Guidance Note 9 of Education Guide by CBEC- Rules of Interpretation Despite doing away with the service-specific descriptions, there will be some descriptions where some differential treatment will be available to ....

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.... 9.1.2 What is the scope of clause (1) of section 66F: 'where a service is capable of differential treatment for any purpose based on its description, the most specific description shall be preferred over a more general description'. This rule can also be best understood with below illustrations - ♦The services provided by a real estate agent are in the nature of intermediary services relating to immovable property. As per the Place of Provision of Service Rule, 2012, the place of provision of services provided in relation to immovable property is the location of the immovable property. However in terms of the Rule 5 pertaining to services provided by an intermediary the place of provision of service is where the intermedia....