TaxTMI 
TaxTMI 
TaxTMI 
2024 (5) TMI 12
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....e. Thus, any activity carried out by any person for another for valuable consideration is service. It includes declared service as defined in Section 65B(22) of the Finance Act, 1944 read with 66E of the Act. The definition excluded few categories of activities as service. They are as follows:- a) an activity which constitutes merely, (i) a transfer of title in goods or immovable property, by way of sale, gift or in any other manner; or (ii) such transfer, delivery supply of any goods which is deemed to be a sale within the meaning of clause (29A) of article 366 of the Constitution; or (iii) a transaction in money or actionable claim; (b) a provision of service by an employee to the employer in the course of or in relation to his employment; (c) fees taken in any Court or tribunal established under any law for the time being in force. 46. Barring the above exception, certain services were exempted under Mega Exemption Notification No.25/2012 ST dated 20.06.2012 issued under Section 93(1) of the Finance Act, 1944. Certain activities were listed in the negative list. Those services are not liable to tax as Service tax is payable on the value of all services provided or ....
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....e 243 of the Constitution * A Municipality as referred to in clause (e) of article 243P of the Constitution * A Municipal Committee and a District Board, legally entitled to, or entrusted by the Government with, the control or management of a municipal or local fund * A Cantonment Board as defined in section 3 of the Cantonments Act, 2006 * A regional council or a district council constituted under the Sixth Schedule to the Constitution * A development board constituted under article 371 of the Constitution, or * A regional council constituted under article 371A of the Constitution. 2.4.9 Are all local bodies constituted by a State or Central Law local authorities? No. The definition of local authority is very specific as explained in point no 2.4.8 above and only those bodies which fall in the definition comprise local authorities. It would not include other bodies which are merely described as a local body by virtue of a local law. However it may be noted that services by a governmental authority by way of any activity in relation to any function entrusted to a municipality under article 243W of the Constitution are specifically exempt under the mega exemption. ....
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....e Government or by a Government to an autonomous body, the same would be taxable if such service does not fall in the negative list. It is another matter that most of the services provided by the Government are in the negative list. For details please refer to point no. 4.1 of this Guide. 2.4.12 Would taxable services provided by Government or local authorities still be liable to tax if they are covered under any other head of the negative list or are otherwise exempted? No. For example, transport services provided by Government to passengers by way of a stage carriage would not be taxable as transport of passengers by stage carriage has separately been specified in the negative list of services. The specified services provided by the Government or local authorities 50. In Para 4.1 of the Education Guide, it was specifically explained that most of the services provided by Government and Local Authority are in the negative list and were outside the ambit of the service tax. Para 4.1 of Guidance Note 4- Negative List of Services is reproduced below: Guidance Note 4 - Negative List of Services In terms of Section 66B of the Act, service tax will be leviable on all services p....
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.... by government in terms of their sovereign right to business entities, and which are not substitutable in any manner by any private entity, are not support services. 53. In fact, in the Education Guide, list of activities such as grant of mining or licensing rights or audit of government entities established by a special law, which are required to be audited by CAG under Section 18 of the Comptroller and Auditor-General's (Duties, Powers and Conditions of Service) Act, 1971 and therefore such services are performed by CAG under the statue and cannot be performed by the business entity themselves and thus do not constitute support services. 54. If the activity carried out by the Petitioner Municipalities are categorised as Support Service, it cannot be held that there was a provision of taxable service and such service was liable to tax under Section 66B of the Finance Act, 1994 as in force with effect from 01.07.2012. 55. However, for such support services, service tax was payable by the recipient of such service in terms of Rule 2(1)(d) (E) of the Service Tax Rules, 1994 as amended by notification No. 36/2012-ST dated 20.6.2012 with effect from 1.17.2012. 56. For support s....