|
Sale of advertising space or time
|
Statutory coverage
 | Sale of space or time for advertisement, in
any manner is a ‘taxable service’
|
·
Providing space or
time, as the case may be, for display, advertising, showcasing of
any product or service in video programmes, television programmes
or motion pictures or music albums, or on billboards, public
places, buildings, conveyances, cell phones, automated teller
machines, internet
·
Selling of time slots on radio or television by a
person, other than a broadcasting agency or organisation
·
Aerial advertising
·
Sale of space in yellow pages, business directories
|
Exclusions
| Sale
of space for advertisement in print media. "Print
media" means - (i) "newspaper" (ii) "book" but does
not include business directories, yellow pages and trade catalogues
which are primarily meant for commercial purposes
|
·
Sale of time slots
by a broadcasting agency or organisation (It is taxable under
different head)
Exemptions
·
See
para 12.3 for general exemptions
|
|
Scientific and technical consultancy
|
Statutory coverage
·
Service
by a scientist or a technocrat, or any science or technology
institution or organisation, in relation to scientific or
technical consultancy
Case Law/Board Circulars
·
Executory
services would not fall under ‘consultancy services’ - Glaxo Smithkline Pharmaceuticals v. CCE (2005) 1 STT 37 (CESTAT)
– quoted with approval in Glaxo
Smithkline Consumer Healthcare Ltd. v. CCE
(2007) 9 STT 496 (CESTAT).
|
Exclusions
·
Service tax is not
payable by doctors, medical colleges, nursing homes, hospitals,
diagnostic and pathological labs etc. as in common parlance they
are not known as scientists, technocrats etc. - CBE&C letter
No. B.II/I/2000-TRU dated 9-7-2001.
Exemptions
| Notification
No. 9/2007-ST dated 01.03.2007 exempts all taxable services
provided by incubators.
|
| Service
tax exemption is also provided to incubates vide notification
No. 10/2007-ST dated 1-3-2007:
|
| See para 12.3 for general exemptions
|
|
|
Security agency
|
Statutory coverage
| Services by security agency in relation to the
security of any movable or immovable property or person, by providing security personnel or
otherwise
|
| Provision of services of investigation,
detection or verification of any fact or activity [section
65(94)]
|
Case law/Board circulars
·
Service
tax payable on services of safe deposit lockers.
·
Services
provided by ex-servicemen or charitable organization taxable
w.e.f. 18-4-2006.
|
Valuation
| Service tax is payable on gross amount charged for service. It
has been clarified that service tax is payable on entire
amount charged by security agency to client, which includes
salary of guards, employer’s ESIC, PF, contribution towards
labour funds, bonus, leave, uniform etc. No abatement can be
granted in respect of such expenses incurred by security
agency.
|
| In Panther Detective
Services v. CCE
(2007) 8 STT 215 (CESTAT), it was held that service tax is
payable on gross amount including ESI, PF and wages of guards.
The amount should be inclusive of service tax and then back
calculations should be made – same view in Punjab
Ex-Serviceman Corpn v. CCE
(2005) 2 STT 273 (CESTAT).
|
Exemptions
·
See
para 12.3 for general exemptions
|
|
Share Transfer Agent
|
Statutory coverage
| Maintaining record of holders of securities
and deals with all matters connected with the transfer or
redemption of securities or activities incidental thereto
[section 65(95a)]
|
|
Exemptions
·
See
para 12.3 for general exemptions
|
|
Ship Management Service
|
Statutory coverage
·
the supervision of
the maintenance, survey and repair of ship;
·
engagement or
providing of crews;
·
receiving the hire or
freight charges on behalf of the owner;
·
arrangements for
loading and unloading;
·
providing for
victualling or storing of ship;
·
negotiating contracts
for bunker fuel and lubricating oil;
·
payment, on behalf of
the owner, of expenses incurred in providing services or in
relation to the management of ship;
·
the entry of ship in
a protection or indemnity association;
·
dealing with
insurance, salvage and other claims; and
·
arranging of insurance in relation to ship [section
65(96a)]
|
Exemptions
·
See
para 12.3 for general exemptions
|
|
Site formation and clearance etc.
|
Statutory coverage
| Services in relation to site formation and
clearance, excavation and earthmoving and demolition and such
other similar activities.
|
| drilling, boring and core extraction services
for construction, geophysical, geological or similar purposes
|
| soil stabilization
|
| horizontal drilling for the passage of cables
or drain pipes
|
| land reclamation work
|
| contaminated top soil stripping work
|
| demolition and wrecking of building, structure
or road [section 65(97a)]
|
|
Exclusions
·
Services in
relation to agriculture, irrigation, watershed development
·
Drilling, digging,
repairing, renovating or restoring of water sources or water
bodies.
Exemptions
| Exemption to services relating to roads, airports, railways,
transport terminals etc. bridges, port etc. - Notification No.
17/2005-ST dated 7-6-2005
|
| See para 12.3 for general exemptions
|
|
|
Sound recording
|
Statutory coverage
| Recording of sound on any media or device
including magnetic storage device
|
| Services relating to recording of sound in any
manner such as sound cataloguing, storing of sound and sound
mixing or re-mixing or any audio post-production activity
[section 65(98)]
|
|
Exemptions
See
para 12.3 for general exemptions
|
|
Sponsorship service
|
Statutory coverage
| Service in relation to sponsorship
|
| “Sponsorship” includes naming an event
after the sponsor, displaying the sponsor’s company logo or
trading name, giving the sponsor exclusive or priority booking
rights, sponsoring prizes or trophies for competition [section
65(99a)]
|
| Service tax is leviable only when the sponsor
is any body corporate or firm [section 65(105)(zzzn)]
|
Reverse charge - Person liable for payment of
tax
| In case of sponsorship service provided to a body corporate or
firm located in India, the body corporate or firm receiving
such sponsorship service will be liable to pay service tax
[rule 2(1)(d)(vii)].
|
| If the recipient of sponsorship service is located
outside India, service tax is required to be paid by the
service provider and not by the
recipient.
|
|
Exclusions
·
Sponsorship of
sports events is excluded from the scope of this levy
·
Any financial or
other support in the form of donations or gifts, given by the
donors is not taxable, if the service provider is under no
obligation to provide anything in return to such donors [section
65(99a)]
Exemptions
·
See
para 12.3 for general exemptions
|
|
Steamer agent
|
Statutory coverage
| Service in relation to a ship’s husbandry or
dispatch or any administrative work related thereto
|
| Booking, advertising or canvassing of cargo
|
| Container feeder services [section 65(100)]
|
Case Law/Board Circulars
·
Expenses
paid by steamer agent on behalf of shipping line not liable to
service tax - CBE&C circular No. B 43/1/97-TRU dated 6-6-1997.
|
Exemptions
·
See
para 12.3 for general exemptions
|
|
Stock-broking
|
Statutory coverage
| Service by a stock-broker in connection with
the sale or purchase of securities listed on recognised stock
exchange.
|
| As per rule 6(1)(i) of Service Tax Valuation Rules (Earlier, it
was Explanation 1 clause (a) to section 67 upto
18-4-2006), the value of taxable services shall include the
commission or brokerage charged by a broker on the sale or
purchase of securities including the commission or brokerage
paid by the stock-broker to any sub-broker.
|
Case Law/Board Circulars
·
No tax on turnover
charges payable to stock exchange – prima facie view in JSEL Securities Ltd. v. CCE
(2007) 8 STT 428 (CESTAT).
|
Exemptions
See
para 12.3 for general exemptions
|
|
Storage and warehousing
|
Statutory coverage
·
Services
in relation to storage and warehousing of goods, including liquids
and gases
[section
65(102)]
Case Law/Board Circulars
| Storage outside the port premises is taxable - Gujarat Chem
Port Terminal Co. Ltd. v. CC (2005) 1 STT 98
(CESTAT)
|
| Storage
of empty containers taxable - CBE&C circular No.
60/9/2003-ST dated 10-7-2003
|
|
Exclusions
·
Service provided
for storage of agricultural produce or any service provided by a
cold storage excluded [section 65(102)]
Exemptions
·
See
para 12.3 for general exemptions
|
|
Survey and exploration of mineral
|
Statutory coverage
| Geological, geophysical or other prospecting,
surface or sub-surface surveying or map making service, in
relation to location or exploration of deposits of mineral,
oil or gas [section 65(104a)]
|
|
Exemptions
·
See
para 12.3 for general exemptions
|
|
Survey and map-making
|
Statutory coverage
·
Geological,
geophysical or any other prospecting, surface, sub-surface or
aerial surveying or map-making of any kind [section 65(104b)]
|
Exclusions
·
Service provided by
an agency under the control of, or authorised by, the Government,
in relation to survey and map-making not taxable [section 65(105)(zzzc)]
·
Survey and
exploration of mineral excluded [section 65(104b)] (as covered
under another head)
Exemptions
·
See
para 12.3 for general exemptions
|
|
Technical inspection and certification
|
Statutory coverage
·
Inspection
or examination of goods or process or material or any immovable
property to certify that such goods or process or material or
immovable property qualifies or maintains the specified standards,
including functionality or utility or quality or safety or any
other characteristic or parameter [section 65(108)]
|
Exclusions
·
Service in relation
to inspection and certification of pollution levels is excluded
[section 65(108)]
Exemptions
·
See
para 12.3 for general exemptions
|
|
Technical testing and analysis
|
Statutory coverage
| Service in relation to physical, chemical,
biological or any other scientific testing or analysis of
goods or material or any immovable property
|
| Clinical testing of drugs and formulations
[section 65(106)]
|
Case Law/Board Circulars
·
Sample collection
centers not taxable –
Dr. Lal Path Lab (P)
Ltd. v. CCE (2006) 5
STT 171 (CESTAT),
|
Exclusions
·
Testing or analysis
service provided in relation to human beings or animals is
excluded.
| Testing
or analysis for the purpose of determination of the nature of
diseased condition, identification of a disease, prevention of
any disease or disorder in human beings or animals is not
taxable. Medical testing and diagnosis has been excluded from
service tax [section 65(106)]
|
Exemptions
| Testing and analysis of water quality by Government laboratories
exempt - Notification No. 6/2006-Service Tax dated 1.3.2006.
|
| Exemption to clinical testing of newly
developed drugs - Notification No. 11/2007-ST dated
1-3-2007.
|
| See para 12.3 for general exemptions
|
|
|
Telecommunication Services
|
Statutory coverage
| Service
of any description provided by means of any transmission, emission or reception of
signs, signals, writing, images and sounds or intelligence
or information of any nature, by wire, radio, optical, visual
or other electro-magnetic means
or systems, including the related transfer or assignment of
the right to use capacity for such transmission, emission or
reception
|
| voice mail, data services, audio tex services, video tex
services, radio paging
|
| fixed telephone services including provision of
access to and use of the public switched telephone network for the transmission and
switching of voice, data and video, inbound and outbound
telephone service to and from national and international
destinations
|
| cellular mobile telephone services including
provision of access to and use of switched or
non-switched networks for the transmission of voice, data and
video, inbound and outbound roaming
service to and from national and international destinations
|
| carrier services including provision of wired or
wireless facilities to originate, terminate or
transit calls, charging for interconnection, settlement or
termination of domestic or international
calls, charging for jointly used facilities including pole
attachments, charging for the exclusive use of circuits, a leased circuit or a dedicated
link including a speech circuit,
data circuit or a telegraph circuit
|
| provision of call management services for a fee
including call waiting, call forwarding, caller identification, three-way calling,
call display, call return, call screen, call blocking, automatic
call-back, call answer, voice mail, voice menus and video
conferencing
|
| private network services including provision of
wired or wireless telecommunication link between specified points for the exclusive use of the client
|
| data transmission services including provision of
access to wired or wireless facilities and services specifically designed for efficient transmission of
data
|
| communication through facsimile,
pager, telegraph and telex [section 65(109a)]
|
|
Exclusions
·
Service in relation to on-line information and database access or retrieval, a
broadcasting agency or organisation in relation to broadcasting
and internet telephony
excluded [section
65(109a)] (since covered
under another head)
Sale
of SIM Card
| In
Bharat Sanchar Nigam Ltd. v. UOI (2006) 3 SCC 1
= 152 Taxman 135 = 3 STT 245 = 282 ITR 273 = 3 VST 95 = 145
STC 91 = AIR 2006 SC 1383
(SC 3 member bench), it has been held that what a SIM
card represents is ultimately a question of fact. In
determining the issue, the assessing authorities will have to
keep in mind the following principles, ‘If the SIM card is
not sold by the assessee to the subscribers but is merely part
of the services rendered by service providers, then a SIM card
cannot be charged separately to sales tax. It would depend
ultimately upon the intention of parties. If the parties
intended that the SIM card would be a separate object of sale,
it would be open to the sales tax authorities to levy sales
tax thereon. If the sale of SIM card is merely incidental to
the service being provided and only facilitates the
identification of subscriber, their credit and other details,
it would not be assessable to sales tax. In any event, cost of
service cannot be included in the value of SIM card by relying
on ‘aspects’ doctrine.
|
Exemptions
·
See
para 12.3 for general exemptions
|
|
Tour operator
|
Statutory coverage
| ‘Tour’ means a journey from one place to
another irrespective of the distance between such places.
|
| Business of planning, scheduling, organising
or arranging tours (which may include arrangements for
accommodation, sightseeing or other similar services) by any
mode of transport
|
| Business of operating tours in a tourist
vehicle covered by a permit granted under the Motor Vehicles
Act [section 65(115)]
|
Case Law/Board Circulars
·
In
Praseetha Suresh v. CCE
(2007) 8 STT 324 (CESTAT), it was held that the vehicle is
required to satisfy specifications as per rule 128 of Motor
Vehicle Rules. If these are not satisfied, it is not a tourist
vehicle and hence the service is not taxable.
|
Exemptions
| In case of package tour, w.e.f. 23-8-2007,
service tax is payable on 25% of gross amount charged (Till
22-8-2007, service tax was payable on 40% of gross amount
charged) - Notification No. 1/2006-ST dated 1-3-2006
|
| Tax only on 10% amount when operator only
provides booking services
- Notification No. 1/2006-ST dated 1-3-2006.
|
| Tax payable 40% in case of other tours -
Notification No. 1/2006-ST dated 1-3-2006.
|
| See para 12.3 for general exemptions
|
|
|
Transport of persons by cruise ships
|
Statutory coverage
·
Transport
of person embarking from any port by a cruise ship. “cruise
ship” means a ship or vessel used for providing recreational or
pleasure trips.
|
Exemptions
·
See
para 12.3 for general exemptions
|
|
Transport of goods by air
|
Statutory coverage
·
Transport
of goods by aircraft
|
Exemptions
| Service of transport of goods is exempt if it
is in relation to transport of export goods by aircraft -
Notification No. 29/2005-ST dated 15-7-2005.
|
| See para 12.3 for general exemptions
|
|
|
Transport of goods by road
|
Statutory coverage
| Service by a goods transport agency, in
relation to transport of goods by road in a goods carriage.
|
| ‘Goods transport agency’ means any person
who provides service in relation to transport of goods by road
and issues consignment note, by whatever name called
[section 65(50b)]
|
Reverse charge - Person liable for payment of
service tax
As
per rule 2(1)(d)(v) of Service Tax Rules, Consignor or consignee who
is paying freight will be liable to pay service tax, if
consignor or consignee is any one of the following -
(a) any
factory registered under or governed by the Factories Act, 1948
(63 of 1948).
(b) any
company formed or registered under the Companies Act, 1956 (1 of
1956).
(c) any
corporation established by or under any law.
(d) any
society registered under the Societies Registration Act, 1860 (21
of 1860) or under any law corresponding to that Act in force in
any part of India.
(e) any
co-operative society established by or under any law.
(f) any
dealer of excisable goods, who is registered under the Central
Excise Act, 1944 (1 of 1944) or the rules made thereunder.
(g)
any body corporate established, or a partnership firm
registered, by or under any law.
|
Cenvat Credit
·
The service
receiver should pay tax by GAR-7 challan @ 3.09%. Then, he can
avail Cenvat credit of tax so paid by him [Notification No.
1/2006-ST dated 1-3-2006].
Exemptions
·
As per exemption notification No. 13/2008-ST dated
1-3-2008, actually service tax is payable on 25% of gross amount
charged from customer by goods transport agency. Thus, service tax
payable will be 3% plus 2% education cess plus 1% SAH education
cess i.e. total 3.09%. Transport of
fruits, vegetables, eggs or milk by road (as exempt under
notification 33/2004-ST dated 3-12-2004)
·
Gross Amount charged
on consignments transported in a goods carriage does not exceed
Rs. 1,500 (as exempt under clause (i) of notification No.
34/2004-ST dated 3-12-2004) [This is total of all consignments
carried in a goods carriage at one time]
·
Gross Amount charged
on individual consignment transported in a goods carriage does not
exceed Rs. 750 (as exempt under clause (ii) of notification No.
34/2004-ST dated 3-12-2004).
·
See
para 12.3 for general exemptions
|
|
Transport of goods in containers by rail
|
Statutory coverage
·
Transport
of goods in containers by rail
|
Exclusions
·
Service provide by
Government railway exempt.
Exemptions
|
