Services tax — Law & Practice (Volume 1 and 2)

BRIEF CONTENTS PART A: REFERENCE TABLES Tables Pages 1. Words and Expressions defined in the Act or the Rules forming part of Service Tax Law .. .. ..

A-1 2. Exemptions available under the New Regime effective from 01-07-2012 .. .. ..

A-21 3. Negative List of Services .. .. ..

A-47 4. Declared List of Services .. .. ..

A-51 5. Rate of Service Tax .. .. ..

A-53 6. Abatements .. .. ..

A-55 7. Reverse Charge Mechanism .. .. ..

A-61 8. Place of Provision of Services .. .. ..

A-65 9. Interest, Penalties and Prosecutions under Service Tax Law .. .. ..

A-69 10. Time Obligations under Service Tax Law . . .. ..

A-73 11. Territorial Jurisdiction of “India” for the purpose of Service Tax .. .. ..

A-83 12. Accounting Codes of Services .. .. ..

A-87 PART B: SERVICE TAX PROCEDURES Chapters 1.

2.

3.

4.

5.

6.

6A 7.

8.

9.

9A. 10.

11.

: : : : : : : : : : : : :

Pages Registration .. ..

Books and Records .. ..

Classification of Services .. ..

Export and Import of Services .. ..

Value of Taxable Services .. ..

Availment and Utilisation of CENVAT Credit Judicial Views on CENVAT Credit. . ..

Point of Taxation .. ..

Ascertainment of Place of Provision of Service.

Payment of Service Tax .. ..

Rate of Service Tax .. ..

Reverse Charge Mechanism .. ..

Threshold Exemption .. ..

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B-1 B-17 B-33 B-47 B-69 B-109 B-153 B-187 B-207 B-247 B-263 B-275 B-303

Service Tax Law and Practice

II

Chapters

Pages

12. : 13. : 14. : 15.

16.

17.

18.

19.

20.

21.

22.

23.

: : : : : : : : :

Filing of Service Tax Return .. .. ..

Assessment .. .. ..

Exemption for Services Procured by SEZ Unit/ Developer .. .. ..

Interest, Penalties and Prosecution . . .. ..

Rectification of Mistakes in Assessment Order ..

Appeals .. .. ..

Search and Seizure .. .. ..

Service Tax Audit .. .. ..

Advance Rulings .. .. ..

Indirect Tax Ombudsman .. .. ..

Self-adjustment or Refund of Excess Service Tax Issue of Show Cause Notice and Attachment or Charge on Property .. .. ..

B-307 B-317 B-323 B-349 B-381 B-385 B-411 B-417 B-437 B-453 B-463 B-479

PART C: TAXABLE SERVICES Scheme of Service Taxation ..

1. What is Service ..

2. Declared Services ..

3. Negative List of Services ..

4. Exemptions available in Service Tax Regime 5. Services Provided or Received by Government Local authority & Governmental authority . .

6. Renting of Immovable Property Services . .

7. Works Contract & Construction Services . .

8. Financial Services ..

9. Transport of Goods Services ..

10. Transport of Passengers Services ..

11. Supply of Foods or Drinks Services ..

12. Education Services ..

13. Health care Services ..

14. Sports Services ..

15. Information Technology Services ..

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C-1 C-5 C-43 C-61 C-91

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C-151 C-195 C-213 C-267 C-291 C-315 C-339 C-353 C-377 C-387 C-395

Brief Contents

III

Chapters

Pages

16 . OIDAR Services 17. Aggregator

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C-415 C-429

DETAILED CONTENTS—VOLUME I PART A: REFERENCE TABLES Tables Pages 1. Words and Expressions defined in the Act or the Rules forming part of Service Tax Law .. .. ..

A-1 2. Exemptions available under the New Regime effective from 01-07-2012 .. .. ..

A-21 3. Negative List of Services .. .. ..

A-47 4. Declared List of Services .. .. ..

A-51 5. Rate of Service Tax .. .. ..

A-53 6. Abatements .. .. ..

A-55 7. Reverse Charge Mechanism .. .. ..

A-61 8. Place of Provision of Services .. .. ..

A-65 9. Interest, Penalties and Prosecutions under Service Tax Law .. .. ..

A-69 10. Time Obligations under Service Tax Law . . .. ..

A-73 11. Territorial Jurisdiction of “India” for the purpose of Service Tax .. .. ..

A-83 12. Accounting Codes of Services .. .. ..

A-87

PART B: SERVICE TAX PROCEDURES

1 REGISTRATION

Chapters 1. Persons requiring Registration .. .. ..

2. Registration Number .. .. ..

3. Application for Registration (Except for Special Category of Persons) .. .. ..

4. Application of Registration (For Special Category of Persons) .. .. ..

4A. Procedure for registration for OIDAR service provider located in non taxable territory .. .. ..

5. Single or Multiple Registration .. .. ..

6. Centralised Registration .. .. ..

7. Grant of Certificate of Registration .. .. ..

[V]

B-1 B-3 B-4 B-7 B-8 B-9 B-9 B-11

Service Tax Law and Practice

VI

Chapters

Pages

8. Change in the Existing Certificate of Registration . .

9. Surrender or Cancellation of Certificate of Registration 10. Service category on Registration Certificate ..

11. Penalty for Non-registration .. .. .. ..

REFERENCE TABLE

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B-12 B-12 B-13 B-14 B-14

2 BOOKS AND RECORDS

1. Records to be maintained by a Service Provider .. ..

2. Records to be maintained by an Input Service Distributor . .

3. Clarifications made by Circular No. 97/8/2007, dated 23-08-2007 .. .. ..

4. List of Records which may be maintained by a Service Provider 5. Pro forma Register of Service Tax .. .. ..

6. Penalty for non-maintenance or non-furnishing of books or records .. .. .. .. .. ..

REFERENCE TABLE

B-17 B-26 B-26 B-28 B-30 B-30 B-31

3 CLASSIFICATION OF SERVICES

1. Rules of Classification .. .. ..

2. How to Classify the Services under Section 66F. . . . ..

3. Basis of Classification – Single Agreement containing two different types of services cannot be considered as bundled service .. .. ..

4. Basis of Classification – Substance of transaction or Classification used by service provider .. .. .. .. .. ..

REFERENCE TABLE

B-33 B-35

B-43 B-44 B-45

4 EXPORT AND IMPORT OF SERVICES

A. EXPORT OF SERVICES 1. When Services are considered to be exported 2. Export Benefits ..

3. Judicial Precedents relating to Export of Service B. IMPORT OF SERVICES

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B-47 B-54 B-58

VII

Detailed Contents Chapters

Pages

1. When Import of services takes place .. ..

2. Value of Import of Services .. ..

3. POT for Services Received from Non Taxable Territory 4. Exemptions in case of Import of Service 5. Judicial Precedents relating to Import of Service . . .. ..

REFERENCE TABLE

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B-60 B-61 B-62 B-63 B-65 B-66

5 VALUE OF TAXABLE SERVICES

1. Value of taxable service .. .. ..

2. Determination of value of service in case of non-monetary value of taxable service or situation of unascertainable value.

3. Value of taxable service of execution of works contract ..

4. Value of taxable service in relation to money changing ..

5. Valuation in case of Supply of Foods/Drink 6. Value of taxable service of Online Information or Database Access or Retrieval Services (OIDAR) by service provider located in non taxable territory .. .. ..

7. Out-of-Pocket Expenses forms part of the Taxable Value . .

8. Expenditure incurred by Service Provider as a pure agent can be excluded from the taxable value .. .. ..

9. Specified inclusions and exclusions from the taxable value of specific services .. .. ..

10. Indication of separate components of expenditure on invoice is immaterial .. .. ..

11. Should the Cost of Free Supply of Material be Included in Taxable Value of Service ? .. .. ..

12. Power of Central Excise Officer to question and re-determine value of taxable services .. .. ..

13. Abatement .. .. ..

14. Judicial Precedents relating to Valuation . . .. ..

REFERENCE TABLE .. .. ..

B-69 B-74 B-75 B-83 B-83

B-85 B-85 B-88 B-93 B-95 B-96 B-97 B-98 B-102 B-105

6 AVAILMENT AND UTILISATION OF CENVAT CREDIT

1. Scheme of CENVAT Credit 2. Meaning of Important Terms

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B-109 B-109

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Pages

3. The Duties and Taxes for which CENVAT Credit can be Availed .. .. ..

4. The Payments for which CENVAT Credit can be Utilised . .

5. Conditions for Availing CENVAT Credit . . .. ..

6. Reversal of CENVAT Credit – in case of removal of goods 7. Utilization of CENVAT credit in case of mixed output ..

8. Refund of CENVAT Credit .. .. ..

9. Input Credit Distribution .. .. ..

10. Documents and Records required for CENVAT Credit ..

11. Submission of Return .. .. ..

12. Recovery and Penalty .. .. ..

13. Transfer of CENVAT Credit .. .. .. .. .. ..

REFERENCE TABLE

B-119 B-122 B-123 B-131 B-134 B-139 B-142 B-145 B-147 B-147 B-149 B-150

6A JUDICIAL VIEWS ON CENVAT CREDIT

A. B. C. D. E.

CENVAT Credit of various input service ..

CENVAT Credit for input and Capital goods ..

Utilisation of CENVAT Credit ..

Distribution and Transfer of CENVAT Credit ..

Documents and Procedures for availing and utilizing CENVAT Credit ..

F. Refund of CENVAT Credit .. . .

G. Other Issues .. ..

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B-153 B-167 B-171 B-173

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B-175 B-180 B-183

7 POINT OF TAXATION (POT)

1.

2.

3.

4.

Introduction .. ..

Determination of Point of Taxation . . ..

Point of Taxation in case of Services under Reverse Charge POT in case of Copyright or Intellectual Property Right Services .. ..

5. Point of Taxation in case of Specified Events (Rules 4 & 5) 6. Transitional Provision under POT Rules (Rule 9) . . .. .. .. ..

REFERENCE TABLE

B-187 B-188 B-193 B-198 B-198 B-204 B-205

Detailed Contents

IX

Chapters

Pages

8 ASCERTAINMENT OF PLACE OF PROVISON OF SERVICE 1. Introduction-Objective of POP Rules .. .. ..

B-207 2. A Glance at POP Rules .. ..

B-208 3. Meaning-Taxable Territory, Location of Service Provider and the Recipient .. ..

B-209 .. .. ..

4. Rule-wise Discussion on Rules 3 to 14 B-216 5. Person Liable to Pay Service Tax .. .. ..

B-241 Reference Table .. .. ..

B-242

9 PAYMENT OF SERVICE TAX

1. Who is Liable to Pay Service Tax .. .. ..

2. When Liability to Pay Service Tax Arises . . .. ..

3. Due Dates for Payment of Service Tax .. .. ..

4. Deposit of Service Tax .. .. ..

5. Payment of Service Tax in Advance .. .. ..

6. Provisional Payment of Service Tax .. .. ..

7. Liability to pay Service Tax not collected from Clients ..

8. Service Tax Liability for the Tax Collected without being Due 9. Income Tax TDS Not to be Deducted on Service Tax Amount 10. Rate of Service Tax .. .. ..

11. Interest and Penalty .. .. .. .. .. ..

REFERENCE TABLE

B-247 B-251 B-252 B-254 B-255 B-256 B-256 B-257 B-257 B-258 B-258 B-259

9A RATE OF SERVICE TAX

1. Introduction 2. Standard rate for all services 3. Alternate rate for specified services 4. Specified Cesses on all services APPENDIX

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B-263 B-263 B-264 B-267 B-271

Service Tax Law and Practice

X

Chapters

Pages

10 REVERSE CHARGE IN SERVICE TAX

1. Which Services are under reverse charge . . .. ..

2. Impact of Reverse Charge Mechanism .. .. ..

3. Manner of issue of invoice under the Partial Reverse Charge Mechanism .. .. ..

4. Respective liability of the Service Provider and the recipient .. .. ..

REFERENCE TABLE

B-275 B-298 B-299 B-300 B-300

11 THRESHOLD EXEMPTION

1. What is Threshold Exemption ..

2. Persons excluded from the benefit of Threshold Exemption .

3. Option not to avail the Threshold Exemption. . .. .. ..

REFERENCE TABLE

B-303 B-305 B-306 B-306

12 FILING OF SERVICE TAX RETURN

1.

2.

3.

4.

5.

6.

Prescribed Return Form and Periodicity . . .. ..

B-307 Due Dates of Filing the Return .. .. ..

B-310 Documents to be enclosed with the Return . . .. ..

B-310 Filing of Return by Input Service Distributor .. ..

B-311 Filing of Nil Return .. .. ..

B-311 Filing of Single Return by the Assessee rendering more than one Service .. .. ..

B-312 7. Filing of Revised Return or Late Return . . .. ..

B-312 8. Late fee for delay or Penalty for non-filing of Return ..

B-312 9. E-filing of Service Tax Return .. .. ..

B-313 10. Scheme for filing Returns through Service Tax Return Preparers .. ..

B-314 11. Scrutiny of Service Tax Return .. .. ..

B-314 REFERENCE TABLE .. .. ..

B-315

Detailed Contents

XI

Chapters

Pages

13 ASSESSMENT

1. Self-Assessment .. ..

2. Provisional Assessment .. ..

3. Best Judgment Assessment Revived under Service Tax .. ..

REFERENCE TABLE

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B-317 B-317 B-319 B-322

14 EXEMPTION FOR SERVICES PROCURED BY SEZ UNIT/ DEVELOPER

1. Purpose and manner of Exemption .. ..

2. Exemption as effective from 01-07-2013 . . ..

3. Exemption as effective from 01-07-2012 to 30-06-2013 4. Exemption as effective from 01-03-2011 to 30-06-2012 5. Exemption as effective from 03-03-2009 6. Exemption as effective from 31-03-2004 to 02-03-2009 7. Judicial Precedents .. ..

REFERENCE TABLE

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B-323 B-324 B-330 B-334 B-340 B-344 B-345 B-347

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B-349 B-356 B-366 B-379

15 INTEREST,PENALTIES AND PROSECUTION

1. Charging of Interest 2. Penalties under Service Tax 3. Prosecution REFERENCE TABLE

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16 RECTIFICATION OF MISTAKES IN ASSESSMENT ORDER

1.

2.

3.

4.

5.

6.

7.

Mistakes that can be Rectified .. .. ..

Authority Empowered to Rectify the Mistakes .. ..

At whose instance Mistake can be Rectified ..

Time-limit within which an Order can be Rectified . . ..

Whether an Order under Appeal or Revision can be rectified Amending Order .. .. ..

Whether the provision of rectification of mistake can be used to re-open hearing .. .. ..

B-381 B-382 B-382 B-383 B-383 B-383 B-384

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Pages

17 APPEALS

1. Appeal to Commissioner of Central Excise (Appeals) 2. Appeal to Appellate Tribunal .. ..

3. Appeal to High Court/National Tax Tribunal ..

4. Appeal to Supreme Court .. ..

5. National Litigation Policy of the Government .. .. ..

REFERENCE TABLE

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B-385 B-391 B-401 B-403 B-405 B-407

18 SEARCH AND SEIZURE

1. Authority Empowered to permit Search and Seizure ..

2. Authority Empowered to Carry Out Search and Seizure. . . .

3. Recovery of Tax without Ascertainment of Liability cannot be made 4. Illegality of Search does not Vitiate Trial or Adjudication proceedings 5. Application of Provisions of Code of Criminal Procedure, 1973

B-411 B-413 B-414 B-414 B-415

19 SERVICE TAX AUDIT AND SCRUTINY OF RETURNS

1. Administrative Aspect of Service Tax Audit 2. Legislative Aspect of Service Tax Audit . .

3. Scrutiny of Service Tax Returns .. ..

REFERENCE TABLE

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B-417 B-423 B-430 B-434

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B-437 B-438 B-442 B-445 B-445

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B-447 B-449

20 ADVANCE RULINGS

1.

2.

3.

4.

5.

6.

Definition and Purpose of “Advance Ruling” ..

Who is Eligible to seek “Advance Ruling” . . ..

Matters on which Advance Ruling can be Sought . .

Questions on which Advance Ruling is not Available Procedure for Applying for the Advance Ruling . .

Procedure to be followed by the Authority on Receipt of Application .. ..

7. Binding Power of Advance Ruling .. ..

Detailed Contents

XIII

Chapters

Pages

8. Powers of the Authority for Advance Ruling 9. Void Advance Ruling ..

10. Power to make Rules .. ..

REFERENCE TABLE

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B-449 B-451 B-451 B-452

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B-453 B-454

21 INDIRECT TAX OMBUDSMAN

1. Need for Indirect Tax Ombudsman. ..

2. The Indirect Tax Ombudsman Guidelines 2011

22 SELF-ADJUSTMENT OR REFUND OF EXCESS SERVICE TAX

1. Cases where Self- Adjustment of excess service tax payment is permitted .. .. ..

B-463 2. Refund of service tax-for excess payment made ..

B-467 .. .. ..

B-478 REFERENCE TABLE

23 ISSUE OF SHOW CAUSE NOTICE AND ATTACHMENT OR CHARGE ON PROPERTY

1.

2.

3.

4.

Recovery of Service Tax under Section 73. . ..

Recovery of Service Tax under Section 73A ..

Provisional Attachment of Property under Section 73C Recovery of Service Tax dues from Third Party under section 87 ..

5. First Charge on property under Section 88 ..

6. Recovery of Arrears in Instalments .. .. .. ..

REFERENCE TABLE

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B-479 B-488 B-489

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B-494 B-495 B-495 B-496

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PART C: SCHEME OF SERVICE TAXATION AND TAXABLE SERVICES Scheme of Service Taxation

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C-1

1 WHAT IS SERVICE 1. What constitutes a ‘service’ .. .. ..

2. Activities specified in the Declared List are Taxable Services. .

3. Exclusion of Specified Activities from the Coverage of Definition of ‘Service’ ..

4. Exclusion of Activities by Specified Persons from Service . .

5. Taxability of Services . . ..

6. Dispute in Taxability of Legal Services .. .. .. .. .. ..

REFERENCE TABLE

C-7 C-20 C-21 C-35 C-39 C-39 C-41

2 DECLARED SERVICES 1. Renting of Immovable Property .. .. ..

2. Construction services .. .. ..

3. Temporary transfer or permitting the use or enjoyment of any Intellectual Property Right (IPR) .. .. ..

4. Development, design, programming, customization, adaptation, up gradation, enhancement, implementation of information technology software .. . . ..

5. Activities in relation to delivery of goods on hire purchase or any system of payment by instalments .. ..

6. Transfer of goods by way of hiring, leasing, licensing or any such manner without transfer of right to use such goods . .

7. Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act .. ..

8. Service portion in execution of a works contract ..

9. Service portion in an activity wherein goods, being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as part of the activity .. ..

10. Assignment by the Government of the right to use the radio frequency spectrum and subsequent transfers thereof ..

REFERENCE TABLE .. ..

C-44 C-46 C-47

C-47 C-50 C-52 C-54 C-55

C-56 C-58 C-59

Detailed Contents Chapters

XV

Pages

3 NEGATIVE LIST OF SERVICES 1. Entry (a): Services by Government or Local Authority ..

2. Entry (b): Services provided by Reserve Bank of India ..

3. Entry (c): Services by a Foreign Diplomatic Mission located in India .. ..

4. Entry (d): Services relating to agriculture or agricultural produce .. ..

5. Entry (e): Trading of goods .. ..

6. Entry (f): Processes amounting to manufacture or production of goods ..

7. Entry (g): Selling of space or time slots for advertisements . .

8. Entry (h): Access to a road or a bridge on payment of toll charges ..

9. Entry (i): Betting, gambling or lottery .. ..

10. Entry (j):Entry to Establishment Events and Access to Amusement Facilities .. ..

11. Entry (k):Transmission or Distribution of Electricity 12. Entry (l):Specified services relation to Education . . ..

13. Entry (m):Services by way of renting of residential dwelling for use as residence ..

14. Entry (n):Specified financial services ..

15. Entry (o):Services relating to transportation of passengers . .

16. Entry (p):Services relating to transportation of goods ..

17. Entry (q):Funeral, burial, crematorium or mortuary services. .. ..

REFERENCE TABLE

C-64 C-67 C-68 C-68 C-71 C-72 C-73 C-75 C-76 C-78 C-80 C-81 C-82 C-83 C-84 C-87 C-89 C-90

4 EXEMPTIONS AVAILABLE IN SERVICE TAX REGIME

1. Exemptions available under Mega Exemption NN 25/2012-ST . C-93 2. Exemption for the amount paid as R&D Cess–NN. 14/2012-ST C-129 3. Exemption for Services to Foreign Diplomatic Mission & Foreign Consular post in India–NN. 27/2012-ST . . ..

C-130 4. Exemption for Property Tax Paid on Immovable Property – NN. 29/2012-ST .. ..

C-131

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5. Exemption for Services provided in relation to GTA to Exporter of goods–NN. 31/2012-ST .. ..

6. Exemption for services provided or to be provided by TBI or STEP–NN. 32/2012-ST .. ..

7. Exemption to Small Scale Service Provider (Threshold exemption ) –NN. 33/2012-ST .. ..

8. Exemption for services to SEZ Unit or Developer for authorized operation–NN. 12/2013-ST .. ..

9. Exemption for service provided by a commission agent located outside India, to cause sale of goods–NN. 42/2012-ST now rescinded by NN. 3/2015, w.e.f. 01-03-2015 ..

10. Exemption to the services of transportation of passengers and goods by Indian Railways–NN. 43/2012-ST from 02-07-2012 to 30-09-2012 .. .. ..

11. Exemption to the services received by an exporter under Focus Market Scheme (FMS) – Notification No. 06/2013-ST, dated 18-04-2013 .. ..

12. Exemption to the services received by an exporter under Focus Product Scheme (FPS) – Notification No. 07/2013-ST, Dated 18-04-2013 .. ..

13. Exemption to the services received by an exporter under Vishesh Krishi and Gram Udyog Yojna (VKGUY) – Notification No. 08/2013-ST, dated 18-04-2013 ..

14. Exemption to Hotel & Restaurant Service Provided in state of Uttarakhand from 17-09-2013 to 31-03-2014 ..

15. Service Tax Exemption against the Scrips issued under Merchandise Export from India Scheme (MEIS) – NN. 10/2015-ST, dated 08-04-2015 .. ..

16. Service Tax Exemption against the Scrips issued under Service Export from India Scheme (SEIS) – NN.11/2015-ST, dated 0804-2015 .. ..

17. Exemption to Services under the Power System Development Fund Scheme NN. 17/2015-ST, dated 19-05-2015 . . ..

18. Retrospective Exemption to services in relation to Remittance of money from Overseas to India – NN.19/2015-ST, dated 1410-2015 .. ..

19. Exemption to services in relation to Information technology Software – NN.11/2016-ST, dated 01-03-2016 .. ..

Pages

C-132 C-132 C-133 C-133

C-134

C-134

C-135

C-138

C-139 C-139

C-140

C-141 C-141

C-142 C-142

Detailed Contents Chapters

20. Exemption in respect of services relating to religious pilgrimage from 1 July 2012 to 19 August 2014 – NN.25/2016, dated 17-05-2016 .. ..

21. No service tax to be levied or collected for the various taxable services provided by Indian Railways prior to 1st July 2012 – Section 99 of the Act .. ..

22. No service tax to be levied or collected to the services provided by the Employees State Insurance Corporation ..

(ESIC) prior to 1st July 2012 – Section 100 of the Act. .

23. No service tax to be levied or collected to the services provided to a governmental authority (as defined after amendment in the definition of government authority w.e.f. 30-01-2014) for the services by way of construction, erection etc. of canal, dam or other irrigation works for the period from 1 July 2012 to 30 January 2014 – Section 101 of the Act ..

24. No service tax to be levied or collected to the services provided to the government, local authority or governmental authority for construction, erection etc. of specified activities under a contract entered prior to 01-03-2015, for the period from 0104-2015 to 29-02-2016 – Section 102 of the Act ..

25. No service tax to be levied or collected to the services of construction, erection etc. of original works pertaining to a port or airport under a contract entered prior to 01-03-2015, for the period from 01-04-2015 to 29-02-2016 – Section 103 of the Act 26. Non levy of Krishi Kalyan Cess (KKC) on invoices issued before 31-05-2016 .. .. ..

27. Exemption provided to services by way of transportation of goods by a vessel from outside India upto the customs station in India. .. .. ..

28. Exemption from service tax provided by State Government Industrial Development Corporations/Undertakings ..

29. Exemption in respect of services relating to advancement of Yoga from 1 July 2012 to 20 October 2015 – NN. 42/2016-ST, dated 26-09-2016 .. .. ..

30. No Service Tax to be paid on transportation services provided by educational institutions between 01-04-2013 to 01-07-2014 - Notification 45/2016-ST, dated 30-09-2016 .. ..

31. No Service Tax to be paid on services provided by operator of Common Effluent Treatment Plant between 01-07-2012 to 3103-2015 - Notification No. 08/2017-ST, dated 20-02-2017 . .

XVII

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C-143

C-143

C-143

C-144

C-144

C-145 C-145

C-145 C-145

C-146

C-146

C-146

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32. No Service Tax to be paid on services by way of admission to a museum between 01-07-2012 to 31-03-2015 – Notification No. 09/2017, dated 28-02-2017 .. .. .. .. ..

REFERENCE TABLE

C-146 C-147

5 SERVICES PROVIDED OR RECIEVED BY GOVERNMENT, LOCAL AUTHORITY OR GOVERNMENTAL AUTHORITY 1. Government, Local Authority or Governmental Authority– Meaning .. ..

C-152 2. Taxability of Services by Government, Local Authority ..

C-155 3. Exemptions to services provided or received by Government, Governmental Authority or local Authority .. ..

C-165 4. Provisions Relating to Service of Grant of Right to use Natural .. ..

C-189 Resources by Government or Local Authority 5. Person liable to pay Service Tax .. .. ..

C-190 ..

C-191 6. POT for services by Government or Local Authority . . .. ..

C-192 REFERENCE TABLE

6 RENTING OF IMMOVABLE PROPERTY SERVICES 1. Declared Service– Entry (a) of Section 66E .. ..

C-196 2. Negative List of Services- Entries (a), (b), (d) and (m) of Section 66D .. ..

C-198 3. Exemptions– Entries (5),(9) and (18) of NN. 25/2012–ST Adhoc Exemption Order No. 1; NN. 29/2012-ST .. ..

C-201 4. Value of Service and Abatement under NN. 26/2012–ST . .

C-210 5. Place of Provision of Service .. ..

C-210 REFERENCE TABLE .. ..

C-211

7 WORKS CONTRACT AND CONSTRUCTION SERVICES 1. Declared Service– Entries (b) and (h) of Section 66E ..

2. Exemptions–Entries (12), 12(A), (13), (14), (14A) and 29 of NN. 25/2012-ST .. .. ..

3. Value of Service and Abatement under NN. 26/2012-ST . .

4. Person liable to pay Service Tax–Reverse Charge ..

5. Point of Taxation .. ..

C-214 C-229 C-252 C-259 C-260

Detailed Contents

XIX

Chapters

Pages

6. Place of Provision of Service REFERENCE TABLE

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C-263 C-264

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C-267 C-277 C-279

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C-282 C-285 C-286 C-289

8 FINANCIAL SERVICES 1. Definition of Service– Exclusions for Money and Goods Transactions ..

2. Declared Service– Entry (g) of Section 66E ..

3. Negative List– Entries (b) and (n) of Section 66D . .

4. Exemptions–Entry (29) , (41) of NN. 25/2012–ST; NN. 19/2015-ST; NN. 33/2012 .. ..

5. Value of Service and Abatement under NN. 26/2012–ST 6. Place of Provision of Service ..

REFERENCE TABLE ..

9 TRANSPORT OF GOODS SERVICES

1. Transportation of Goods–Scope .. .. ..

2. Negative List of Services–Entry (p) of Section 66D. . ..

3. Exemptions- Entries (20), (21), (22) and (53) of NN. 25/2012ST; NN. 43/2012-ST .. ..

4. Value of Service and Abatements under NN. 26/2012-ST 5. Person liable to pay Service Tax– Reverse Charge . . ..

6. Place of Provision of Service .. ..

REFERENCE TABLE .. ..

C-291 C-292 C-299 C-305 C-308 C-309 C-311

10 TRANSPORT OF PASSENGERS SERVICES

1. Transportation of Passengers–Scope .. ..

2. Negative List of Services– Entries (o) and (q) of Section 66D 3. Exemptions– Entries (5A), (22), (23) and (42) of NN. 25/2012ST; NN. 33/2012-ST .. .. ..

4. Value of Service and Abatements under NN. 26/2012-ST 5. Person liable to pay Service Tax–Reverse Charge . . ..

6. Place of Provision of Service .. ..

REFERENCE TABLE .. ..

C-316 C-316 C-321 C-329 C-333 C-334 C-337

XX

Service Tax Law and Practice

Chapters

Pages

11 SUPPLY OF FOODS OR DRINKS SERVICES

1. Declared Services–Entry (i) of Section 66E .. ..

C-340 2. Exemptions– Entries (9), (9A) and (19) of NN. 25/2012-ST; Adhoc Exemption Order No. 1 .. .. ..

C-342 3. Value of Service and Abatements under NN. 26/2012-ST C-349 4. Place of Provision of Service .. ..

C-350 REFERENCE TABLE .. ..

C-351

12 EDUCATION SERVICES

1. Education–Scope .. ..

2. Negative List of Services– Entry (l) of Section 66D. . ..

3. Exemptions–Entries (8), (9), (12) and (34) of NN. 25/2012-ST 4. Place of Provision of Service .. ..

REFERENCE TABLE .. ..

C-354 C-354 C-361 C-373 C-374

13 HEALTHCARE SERVICES

1. Healthcare Service–Scope ..

2. Exemptions– Entries (2), (2A), (2B) (3) and (34) of NN. 25/2012-ST ..

3. Place of Provision of Service ..

REFERENCE TABLE ..

..

C-377

.. .. ..

C-378 C-384 C-385

1. Sports or Sport–Scope .. ..

2. Exemptions–Entries (8), (10) and (11) of NN. 25/2012-ST 3. Place of Provision of Service .. ..

REFERENCE TABLE .. ..

C-387 C-388 C-392 C-393

14 SPORTS SERVICES

Detailed Contents Chapters

XXI

Pages

15 INFORMATION TECHNOLOGY SERVICES

1.

2.

3.

4.

5.

Declared Service – Entry (d) Section 66E .. ..

Information Technology Software – Meaning .. ..

Different Forms of Software .. ..

Whether IT Software are goods or Services .. ..

Whether the Manner of transfer of software makes difference to taxation .. ..

6. Value of Information Technology Service .. ..

7. Exemption to Information Technology Software – NN.11/2016ST, effective from 01-03-2016 .. ..

8. Person Liable to Pay Service Tax .. ..

9. Point of Taxation .. ..

10. Place of Provision of Service .. ..

REFERENCE TABLE .. ..

C-395 C-396 C-399 C-401 C-406 C-408 C-409 C-411 C-411 C-411 C-413

16 OIDAR SERVICES

1. OIDAR services – meaning and coverage . . .. ..

C-416 2. Person liable to pay service tax for OIDAR services ..

C-420 3. Person to be considered as OIDAR service provider in non taxable territory .. ..

C-420 4. Situations where a person may appear to be providing OIDAR services .. .. ..

C-422 5. How OIDAR SP in non taxable territory would ascertain his tax position .. .. ..

C-423 6. Compliance and Administration of service tax liability of SP in non .. .. ..

C-424 taxable territory .. .. ..

C-426 7. Requirements of record keeping .. .. ..

C-426 8. Provisions relating to invoice .. ..

C-426 9. Ascertaining the liability of service provider . .

10. Deposit service tax and filing of service tax returns . . ..

C-427 11. Authority to administer OIDAR service providers in non-taxable .. .. ..

C-427 territory REFERENCE TABLE .. ..

C-428

XXII

Service Tax Law and Practice

Chapters

Pages

17 AGGREGATOR

1. Related Amendment .. ..

2. Related Definitions introduced in Service Tax Rules, 1994 3. Insertion of Specific entry in Rule 2(i)(d) of STR . .

4. Amendment in Notification No. 30/2012-ST ..

5. Discussion .. ..

REFERENCE TABLE ..

———

.. .. .. .. .. ..

C-429 C-429 C-430 C-431 C-432 C-433

.

PART A: REFERENCE TABLES Table 1

: Words & Expressions defined in the Act, Rules or Notifications

Table 2

: Exemptions available in Service Tax

Table 3

: Negative List of Services

Table 4

: Declared List of Services

Table 5

: Rate of Service Tax

Table 6

: Abatements

Table 7

: Reverse Charge Mechanism

Table 8

: Place of Provision of Services – A glance at the POP Rules, 2012

Table 9

: Interest, Penalties and Prosecution under Service Tax Law

Table 10

: Time Obligations under Service Tax Law

Table 11

: Territorial Jurisdiction of India

Table 12

: Accounting Codes of Services

Table 1 Words and Expressions defined in the Act or the Rules forming part of the Service Tax Law (effective from 01-07-2012) Words and Definition Expressions defined Account “Account” means an account bearing interest to the depositor, and includes a non-resident external account and a non-resident ordinary account.

Actionable “Actionable claim” shall have the meaning assigned to it Claim in section 3 of the Transfer of Property Act, 1882.

Advertisement

Advocate

1[Aggregator

“Advertisement” means any form of presentation for promotion of, or brining awareness about, any event, idea, immovable property, person, service, goods or actionable claim through newspaper, television, radio or any other means but does not include any presentation made in person.

“Advocate” has the meaning assigned to it in clause (a) of sub-section (1) of section 2 of the Advocates Act, 1961 (25 of 1961).

Reference

POP Rules -R.2(b) Sec-65B (1) of the Finance Act, 1994 Sec-65B (2) of the Finance Act, 1994

N.N. 25/2012clause (a) of para 2

Rules, “Aggregator” means a person, who owns and manages a ST web based software application, and by means of the 1994- R.2(aa)] application and a communication device, enables a potential customer to connect with persons providing service of a particular kind under the brand name or trade name of the aggregator 2[Provided that aggregator shall not include such person who enables a potential customer to connect with persons providing services by way of renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes subject to following conditions, namely:(a) the person providing services by way of renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes has a service tax registration under provision of these rules; and (b) whole of the consideration for services provided by such service provider is received directly by such service provider and no amount, which forms part of the consideration of services of such service provider, is received by the aggregator directly from either recipient of the service or his representative.]

1. Ins. by Notification No. 5/2015-ST, dated 01-03-2015 (w.e.f. 01-03-2015).

2. Proviso inserted vide NN. 02/2017-ST, dated 12-01-2017 (w.e.f. 22-01-2017).

[ A- 1]

A-2

Service Tax Law and Practice

3[Aggregate Value of Clearances

“Aggregate value of clearances” has the same meaning as N.N. 04/2016 assigned to it in the notification of the Government of clause 2(a) of India in the Ministry of Finance, Department of para 2 Revenue No. 9/2003-Central Excise dated the 1st March 2003, published vide number G.S.R. 139, dated the 1st March , 2003;

Agricultural Extension

“Agricultural extension” means application of scientific Sec-65B (4) of research and knowledge to agricultural practices through the Finance farmer education or training.

Act, 1994

Agricultural Produce Marketing Committee or Board Agriculture

“Agricultural Produce Marketing Committee or Board” Sec-65B (6) of means any committee or board constituted under a State the Finance law for the time being in force for the purpose of Act, 1994 regulating the marketing of agricultural produce.

Aircraft

Airport

4[Amusement Facility

5[Approved Vocational Education Course

“Agriculture” means the cultivation of plants and rearing of all life-forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products.

“Aircraft” has the meaning assigned to it in clause (1) of section 2 of the Aircraft Act, 1934 (22 of 1934).

Sec-65B (3) of the Finance Act, 1994 Sec-65B (7) of the Finance Act, 1994

“Airport” has the meaning assigned to it in clause (b) of Sec-65B (8) of section 2 of the Airports Authority of India Act, 1994. the Finance Act, 1994 “Amusement Facility” means a facility where fun or Sec-65B (9) of recreation is provided by means of rides, gaming devices the Finance or bowling alleys in amusement parks, amusement Act, 1994 arcades, water parks, theme parks or such other places but does not include a place within such facility where other services are provided.

N.N. 25/2012 “Approved Vocational Education Course” means, (i) a course run by an industrial training institute or an clause (ba) of industrial training centre affiliated to the National para 2 Council for Vocational Training or State Council for Vocational Training offering courses in designated trades notified under the Apprentices Act, 1961 (52 of 1961); or (ii) a Modular Employable Skill Course, approved by the National Council of Vocational Training, run by a person registered with the Directorate General of Training, Ministry of Skill Development and Entrepreneurship

3. Ins. by Notification No. 04/2016-ST, dated 15-02-2016 (w.e.f 01-04-2016).

4. Section 65B(9) omitted vide the Finance Act, 2015 read with NN. 14/2015-ST (w.e.f. 01-06-2015).

5. Ins. vide Notification No.9/2016-ST, dated 01-03-2016

Words & Expressions defined in the Act & Rules

A-3

Appellate Tribunal

“Appellate Tribunal” means the Customs, Excise and Sec-65B (10) of Service Tax Appellate Tribunal constituted under section the Finance 129 of the Customs Act, 1962.

Act, 1994

Appropriate Duty

“Appropriate Duty” means duty payable on manufacture N.N. 25/2012 or production under a Central Act or a State Act, but shall clause (b) of para 2 not include ‘Nil’ rate of duty or duty wholly exempt.

Approved Vocational Education Course

“Approved Vocational Education Course” means,–– (i) a course run by an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training 6[or State Council for Vocational Training] offering courses in designated trades notified under the Apprentices Act, 1961; or (ii) a Modular Employable Skill Course, approved by the National Council of Vocational Training, run by a person registered with the Directorate General of Employment and Training, Union Ministry of Labour and Employment; 7[**] 8[***] “Arbitral Tribunal” has the meaning assigned to it in clause (d) of section 2 of the Arbitration and Conciliation Act, 1996 (26 of 1996).

Sec-65B (11) of the Finance Act, 1994

“Assessment” includes self-assessment of service tax by the assessee, reassessment, provisional assessment, best judgement assessment and any order of assessment in which the tax assessed is nil; determination of the interest on the tax assessed or reassessed.

“Associated enterprise” shall have the meaning assigned to it in section 92A of the Income-tax Act, 1961 (43 of 1961).

ST Rules,1994R.2(b)

Authorised “Authorised Dealer of Foreign Exchange” shall have the Dealer of meaning assigned to “authorized person” in clause (c) of section 2 of the Foreign Exchange Management Act, Foreign 1999(42 of 1999).

Exchange “Authorised Medical Practitioner” means a medical Authorised practitioner registered with any of the councils of the Medical recognised system of medicines established or recognized Practitioner by law in India and includes a medical professional having the requisite qualification to practice in any recognised system of medicines in India as per any law for the time being in force

Sec-65B (14) of the Finance Act, 1994

Arbitral Tribunal Assessment

Associated enterprise

N.N. 25/2012clause (c) of para 2

Sec-65B (13) of the Finance Act, 1994

N.N. 25/2012clause (d) of para 2

6. Words inserted vide the Finance Act, 2013 w.e.f. 10-05-2013.

7. Word ‘or’ omitted vide the Finance Act, 2013 w.e.f. 10-05-2013.

8. Sub-clause (iii) omitted vide the Finance Act, 2013 w.e.f. 10-05-2013. Earlier the clause reads as under:“a course run by an institute affiliated to the National Skill Development Corporation set up by the Government of India.”

A-4 Authorised Person

Auxiliary Educational Services

Service Tax Law and Practice "Authorised Person” means any person who is appointed as such either by a stock broker (including trading member) or by a member of a commodity exchange and who provides access to trading platform of a stock exchange or a commodity exchange as an agent of such stock broker or member of a commodity exchange.

9[(f) “auxiliary educational services” means any services relating to imparting any skill, knowledge, education or development of course content or any other knowledge – enhancement activity, whether for the students or the faculty, or any other services which educational institutions ordinarily carry out themselves but may obtain as outsourced services from any other person, including services relating to admission to such institution, conduct of examination, catering for the students under any mid-day meals scheme sponsored by Government, or transportation of students, faculty or staff of such institution;] “Banking Company” has the meaning assigned to it in clause (a) of section 45A of the Reserve Bank of India Act,1934 (2 of 1934).

N.N. 25/2012clause (e) of para 2

or “Betting or Gambling” means putting on stake something of value, particularly money, with consciousness of risk and hope of gain on the outcome of a game or a contest, whose result may be determined by chance or accident, or on the likelihood of anything occurring or not occurring.

"Board" means the Central Board of Excise and Customs constituted under the Central Board of Revenue Act, 1963 (54 of 1963);

Sec-65B (15) of the Finance Act, 1994

N.N. 25/2012 -clause (f) of para 2

N.N. 25/2012clause (g) of para 2; ST Rules, 1994- R. 2(bb); POP Rules-R.2(c) 10[Basic Saving Basic Savings Bank Deposit Account means a Basic N.N. 25/2012Bank Deposit Savings Bank Deposit Account opened under the clause (ga) of guidelines issued by Reserve Bank of India relating para 2 Account thereto Banking Company

Betting Gambling

Board 11

Body Corporate Brand Ambassador

“Body Corporate” has the meaning assigned to it in clause (7) of section 2 of the Companies Act, 1956 (1 of 1956).

“Brand Ambassador” means a person engaged for promotion or marketing of a brand of goods, service, property or actionable claim, event or endorsement of name, including a trade name, logo or house mark of any person.

N.N. 04/2016 clause 2(a) of para 2 ST Rules, 1994- R.2(bc) N.N. 25/2012clause (h) of para 2

9. Clause (f) omitted vide Notification No. 06/2014-ST, dated 11-07-2014(w.e.f. 11-07-2014).

10. Clause (ga) inserted by Notification No.20/2015-ST, dated 21-10-2015 11. Ins. by Notification No. 04/2016-ST, dated 15-02-2016 (w.e.f 01-04-2016).

Words & Expressions defined in the Act & Rules 12[Brand name “brand name or trade name” means, a brand name or a or Trade name trade name, whether registered or not, that is to say, a name or a mark, such as an invented word or writing, or a symbol, monogram, logo, label, signature, which is used for the purpose of indicating, or so as to indicate a connection, in the course of trade, between a service and some person using the name or mark with or without any indication of the identity of that person Business Entity “Business Entity” means any person ordinarily carrying out any activity relating to industry, commerce or any other business or profession.

A-5 ST Rules, 1994- R.2(bca)]

Sec-65B (17) of the Finance Act, 1994

Business Facilitator or Business Correspondent

“Business Facilitator or Business Correspondent” means N.No. 25/2012an intermediary appointed under the business facilitator clause (i) of model or the business correspondent model by a banking para 2 company or an insurance company under the guidelines issued by Reserve Bank of India.

Central Electricity Authority

“Central Electricity Authority” means the authority Sec-65B (18) of constituted under section 3 of the Electricity (Supply) the Finance Act, 1948(54 of 1948).

Act, 1994

Central Transmission Utility

“Central Transmission Utility” shall have the meaning Sec-65B (19) of assigned to it in clause (10) of section 2 of the Electricity the Finance Act, 2003(36 0f 2003).

Act, 1994

Change in “Change in Effective Rate of Tax” shall include a change Effective Rate in the portion of value on which tax is payable in terms of of tax a notification issued in the Official Gazette under the provisions of the Act, or rules made thereunder.

“Charitable Activities” means activities relating to Charitable (i) public health by way of Activities (a) care or counseling of (i) terminally ill persons or persons with severe physical or mental disability, (ii) persons afflicted with HIV or AIDS, or (iii) persons addicted to a dependenceforming substance such as narcotics drugs or alcohol; or (b) public awareness of preventive health, family planning or prevention of HIV infection; (ii) advancement of 13[religion, spirituality or yoga]; (iii) advancement of educational programmes or skill development relating to, (a) abandoned, orphaned or homeless children; (b) physically or mentally abused and traumatized persons; (c) prisoners; or (d) persons over the age of 65 years residing in a rural area; (iv) preservation of environment including watershed, forests and wildlife; 14[***]

12. Ins. by Notification No. 5/2015-ST, dated 01-03-2015 (w.e.f. 01-03-2015).

POT 2(ba)

Rules-

N.No. 25/2012clause (k) of para 2

A-6 Clinical Establishment

Commodity Exchange

Service Tax Law and Practice "Clinical Establishment" means a hospital, nursing home, clinic, sanatorium or any other institution by, whatever name called, that offers services or facilities requiring diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India, or a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases.

“Commodity Exchange” means an association as defined in section 2 (j) and recognized under section 6 of the Forward Contracts (Regulation) Act,1952 (74 of 1952).

N.No. 25/2012clause (j) of para 2

N.No. 25/2012clause (l) of para 2

“Continuous Journey” means a journey for which a single or more than one ticket or invoice is issued at the same time, either by one service provider or through one agent acting on behalf of more than one service provider, and which involves no stopover between any of the legs of the journey for which one or more separate tickets or invoices are issued.

Continuous “Continuous Supply of Service” means any service which Supply of is provided or agreed to be provided continuously or on recurrent basis, under a contract, for a period exceeding Service three months with the obligation for payment periodically or from time to time, or where the Central Government, by a notification in the Official Gazette, prescribes provision of a particular service to be a continuous supply of service, whether or not subject to any condition.

POP R.2(d)

Contract Carriage

N.No. 25/2012clause (m) of para 2 Sec-65B (20) of the Finance Act, 1994

Continuous Journey

“Contract Carriage” has the meaning assigned to it in clause (7) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988) Courier “Courier Agency” means any person engaged in the doorAgency to-door transportation of time-sensitive documents, goods or articles utilising the services of a person, either directly or indirectly, to carry or accompany such documents, goods or articles.

Customs “Customs Station” shall have the meaning assigned to it Station in clause (13) of section 2 of the Customs Act, 1962(52 of 1962).

Declared “Declared Service” means any activity carried out by a Service person for another person for consideration and declared as such under section 66E. Declared Tariff “Declared Tariff” includes charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air-conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit.

Rules-

POT Rules- 2(c)

Sec-65B (21) of the Finance Act, 1994 Sec-65B (22) of the Finance Act, 1994 N.N. 25/2012clause (n) of para 2

13. Subs. for words “religion or spirituality” by Notification No. 20/2015-ST, dated 21-10-2015.

14. The clause (v) omitted by Notification No. 03/2013-ST, dated 01-03-2013 (w.e.f. 01-04-2013). (v) advancement of any other object of general public utility up to a value of,(a) eighteen lakh and seventy five thousand rupees for the year 2012-13 subject to the condition that total value of such activities had not exceeded twenty five lakhs rupees during 2011-12; (b) twenty five lakh rupees in any other financial year subject to the condition that total value of such activities had not exceeded twenty five lakhs rupees during the preceding financial year.

Words & Expressions defined in the Act & Rules 15[Digital Signature

A-7

“Digital Signature” has the same meaning as assigned to it N.N. 04/2016 in the Information Technology Act, 2000 (21 of 2000); clause 2(a) of para 2

Distributor or “Distributor or Selling Agent” has the meaning assigned Selling Agent to them in clause (c) of the rule 2 of the Lottery (Regulation) Rules, 2010 notified by the Government of India in the Ministry of Home Affairs, published in the Gazette of India, Extraordinary, Part-II, Section 3, Subsection (i), vide number G.S.R. 278(E), dated the 1st April, 2010 and shall include distributor or selling agent authorised by the lottery- organising State.

16[Educational Educational Institution means an institution providing Institution services by way of: (i) pre-school education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force; (iii) education as a part of an approved vocational education course;”;

N.N. 25/2012clause (o) of para 2

Electricity Transmission or Distribution Utility

Sec-65B (23) of the Finance Act, 1994

“Electricity Transmission or Distribution Utility” means the Central Electricity Authority; a State Electricity Board; the Central Transmission Utility or a State Transmission Utility notified under the Electricity Act, 2003(36 of 2003); or a distribution or transmission licensee under the said Act, or any other entity entrusted with such function by the Central Government or, as the case may be, the State Government.

17[Entertainme “Entertainment Event” means an event or a performance nt Event which is intended to provide 18[;] recreation, pastime, fun or enjoyment, by way of exhibition of cinematographic film, circus, concerts, sporting event, pageants, award functions, dance, musical or theatrical performances including drama, ballets or any such event or programme.

Financial “Financial Institution” has the meaning assigned to it in Institution clause (c) of section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934).

N.N. 25/2012clause (oa) of para 2

Sec-65B (24) of the Finance Act, 1994]

ST Rules, 1994-R.(bd); POP RulesR.2(e) 19[Foreman of “foreman of chit fund” shall have the same meaning as Sec-65B (23A) Chit fund is assigned to the term “foreman” in clause (j) of of the Finance section 2 of the Chit Funds Act, 1982 Act, 1994

15. Ins. by Notification No. 04/2016-ST, dated 15-02-2016 (w.e.f 01-04-2016).

16. Amended by Notification No. 09/2016-ST, dated 01-03-2016.

17. Section 65B(24) omitted vide the Finance Act, 2015 read with Notification No. 14/2015-ST, dated 19-052015 (w.e.f. 01-06-2015).

18. This “ ; ” seems to be an inadvertently placed mark in the definition.

19. Section 65B(23A) inserted vide the Finance Act, 2015 (w.e.f. 14-05-2015).

A-8

Service Tax Law and Practice

General Insurance Business

"General Insurance Business" has the meaning assigned N.N. 25/2012to it in clause (g) of section 3 of General Insurance clause (p) of Business (Nationalisation) Act, 1972 (57 of 1972). para 2

General Public

“General Public” means the body of people at large N.N. 25/2012sufficiently defined by some common quality of public or clause (q) of impersonal nature. para 2

Goods

“Goods” means every kind of movable property other than actionable claim and money; and includes securities, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.

“Goods Carriage” has the meaning assigned to it in clause (14) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988).

Goods Carriage

Sec-65B (25) of the Finance Act, 1994

N.N. 25/2012clause (r) of para 2; ST Rules, 1994R.2(c1a) Sec-65B (26) of the Finance Act, 1994 Sec-65B (26A) of the Finance Act, 1994

Goods Transport Agency 20[Government

“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.

“Government” means the Departments of the Central Government, a State Government and its Departments and a Union territory and its Departments, but shall not include any entity, whether created by a statute or otherwise, the accounts of which are not required to be kept in accordance with article 150 of the Constitution or the rules made thereunder;

Governmental Authority

21[(s) “governmental authority” means an authority or a N.N. 25/2012board or any other body; clause (s) of (i) set up by an Act of Parliament or a State para 2 Legislature; or

Health Services

(ii) established by Government, with 90% or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution;] Care “Health Care Services” means any service by way of N.N. 25/2012diagnosis or treatment or care for illness, injury, clause (t) of deformity, abnormality or pregnancy in any recognised para 2 system of medicines in India and includes services by way of transportation of the patient to and from a clinical establishment, but does not include hair transplant or cosmetic or plastic surgery, except when undertaken to restore or to reconstruct anatomy or functions of body affected due to congenital defects, developmental abnormalities, injury or trauma.

20. Section 65B(26A) inserted vide the Finance Act, 2015 (w.e.f. 14-05-2015).

21. The definition in clause (s) ssubstituted by NN.- 2/2014-ST (w.e.f. 30-01-2014). The earlier clause read as under:“ “governmental authority’’ means a board, or an authority or any other body established with 90% or more participation by way of equity or control by Government and set up by an Act of the Parliament or a State Legislature to carry out any function entrusted to a municipality under article 243W of the Constitution.”

Words & Expressions defined in the Act & Rules Incubatee

“Incubatee” means an entrepreneur located within the premises of a Technology Business Incubator (TBI) or Science and Technology Entrepreneurship Park (STEP) recognised by the National Science and Technology Entrepreneurship Development Board (NSTEDB) of the Department of Science and Technology, Government of India and who has entered into an agreement with the TBI or the STEP to enable himself to develop and produce hi-tech and innovative products.

“India” means,–– India (a) the territory of the Union as referred to in clauses (2) and (3) of article 1 of the Constitution; (b) its territorial waters, continental shelf, exclusive economic zone or any other maritime zone as defined in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976(80 of 1976); (c) the seabed and the subsoil underlying the territorial waters; (d) the air space above its territory and territorial waters; and (e) the installations, structures and vessels located in the continental shelf of India and the exclusive economic zone of India, for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof.

Information “Information Technology Software” means any Technology representation of instructions, data, sound or image, Software including source code and object code, recorded in a machine readable form, and capable of being manipulated or providing interactivity to a user, by means of a computer or an automatic data processing machine or any other device or equipment.

Inland “Inland Waterway” means national waterways as defined Waterway in clause (h) of section 2 of the Inland Waterways Authority of India Act, 1985(82 of 1985) or other waterway on any inland water, as defined in clause (b) of section 2 of the Inland Vessels Act, 1917(1 of 1917).

Input Service “Input Service Distributor” has the meaning assigned to it Distributor in clause (m) of rule 2 of the CENVAT Credit Rules, 2004.

“Insurance Agent” has the meaning assigned to it in Insurance clause (10) of section 2 of the Insurance Act, 1938 (4 of Agent 1938).

“Insurance Company” means a company carrying on life Insurance insurance business or general insurance business.

Company Interest

A-9 N.N. 25/2012clause (u) of para 2

Sec-65B (27) of the Finance Act, 1994

Sec-65B (28) of the Finance Act, 1994

Sec-65B (29) of the Finance Act, 1994

ST Rules, 1994- R.2(cb) ST Rules, 1994- R.2(cba)

N.N. 25/2012clause (v) of para 2 “Interest” means interest payable in any manner in Sec-65B (30) of respect of any moneys borrowed or debt incurred the Finance (including a deposit, claim or other similar right or Act, 1994 obligation) but does not include any service fee or other charges in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has been utilised.

A-10 Intermediary

Large Taxpayer Leg of journey

Legal Service

Service Tax Law and Practice 22[“Intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the ‘main’ service) or a supply of goods, between two or more persons, but does not include a person who provides the main service or supplies the goods on his account.]

“Large Taxpayer” shall have the meaning assigned to it in the Central Excise Rules, 2002.

“Leg of Journey” means a part of the journey that begins where passengers embark or disembark the conveyance, or where it is stopped to allow for its servicing or refuelling, and ends where it is next stopped for any of those purposes.

“Legal Service” means any service provided in relation to advice, consultancy or assistance in any branch of law, in any manner and includes representational services before any court, tribunal or authority.

Life Insurance “Life Insurance Business” has the meaning assigned to it Business in clause (11) of section 2 of the Insurance Act, 1938 (4 of 1938).

POP R.2(f)

Rules-

ST Rules, 1994- R.2(cc) POP RulesR.2(g)

N.N. 25/2012clause (w) of para 2; S.T. Rules, 1994R.2(cca) N.N. 25/2012 clause (x) of para 2 /ST Rules, 1994R.2(ccb) N.N. 25/2012 clause (xa) of para 2

Life Micro 23[“Life Micro-Insurance Product” shall have the Insurance meaning assigned to it in clause (e) of regulation 2 of the Insurance Regulatory and Development Authority Product (Micro-insurance) Regulations, 2005.]

“Local Authority” meansLocal Sec-65B (31) of (a) a Panchayat as referred to in clause (d) of article 243 the Authority Finance of the Constitution; Act, 1994 (b) a Municipality as referred to in clause (e) of article 243P of the Constitution; (c) 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; (d) a Cantonment Board as defined in section 3 of the Cantonments Act, 2006 (41 of 2006); (e) a regional council or a district council constituted under the Sixth Schedule to the Constitution; (f) a development board constituted under article 371 of the Constitution; or (g) a regional council constituted under article 371A of the Constitution.

22. The definition in clause (f) substituted by Notification No. 14/2014-ST, dated 11-07-2014 (w.e.f. 01-102014). Earlier the deinfition read as follows :- “intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the ‘main’ services) between two or more persons, but does not include a person who provides the main service on his account.

23. Clause (xa) inserted by Notification No. 06/2014-ST, dated 11-07-2014 (w.e.f. 11-07-2014).

Words & Expressions defined in the Act & Rules Location of the “Location of the Service Provider” means(a) where the service provider has obtained a single Service registration, whether centralized or otherwise, the Provider premises for which such registration has been obtained; (b) where the service provider is not covered under subclause (a): (i) the location of his business establishment; or (ii) where the services are provided from a place other than the business establishment, that is to say, a fixed establishment elsewhere, the location of such establishment; or (iii) where services are provided from more than one establishment, whether business or fixed, the establishment most directly concerned with the provision of the service; and (iv) in the absence of such places, the usual place of residence of the service provider.

Location of the “Location of the service receiver” means:(a) where the recipient of service has obtained a single Service registration, whether centralized or otherwise, the Receiver premises for which such registration has been obtained; (b) where the recipient of service is not covered under sub-clause (a): (i) the location of his business establishment; or (ii) where services are used at a place other than the business establishment, that is to say, a fixed establishment elsewhere, the location of such establishment; or (iii) where services are used at more than one establishment, whether business or fixed, the establishment most directly concerned with the use of the service; and (iv) in the absence of such places, the usual place of residence of the recipient of service.

Explanation 1:-. For the purposes of clauses (h) and (i), “usual place of residence” in case of a body corporate means the place where it is incorporated or otherwise legally constituted.

Explanation 2:- For the purpose of clause (i), in the case of telecommunication service, the usual place of residence shall be the billing address.` 24[Lottery “lottery distributor or selling agent” means a person distributor or appointed or authorised by a State for the purposes of promoting, marketing, selling or facilitating in organising Selling Agent lottery of any kind, in any manner, organised by such State in accordance with the provisions of the Lotteries (Regulation) Act, 1998’ Means Transport

A-11 P.O.P R.2(h)

Rules-

P.O.P R.2(i)

Rules-

Sec-65B (31A) of the Finance Act, 1994

of “Means of Transport” means any conveyance designed to POP transport goods or persons from one place to another.

R.2(j)

Rules-

24. Definition of ‘lottery distributor or selling agent’ inserted vide the Finance Act, 2015 (w.e.f. 14-05-2015).

A-12

Service Tax Law and Practice

Metered Cab

“Metered Cab” means any contract carriage on which an Sec-65B (32) of Finance automatic device, of the type and make approved under the the relevant rules by the State Transport Authority, is Act, 1994 fitted which indicates reading of the fare chargeable at any moment and that is charged accordingly under the conditions of its permit issued under the Motor Vehicles Act, 1988(59 of 1988) and the rules made thereunder 25[but does not include radio taxi].

Money

“Money” means legal tender, cheque, promissory note, bill of exchange, letter of credit, draft, pay order, traveller cheque, money order, postal or electronic remittance or any similar such instrument but shall not include any currency that is held for its numismatic value.

“Non Banking Financial Company” has the meaning assigned to it in clause (f) of section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934).

“Non-Banking Financial Company” means(i) a financial institution which is a company; or (ii) a non-banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; or (iii) such other non-banking institution or class of such institutions, as the Reserve Bank of India may, with the previous approval of the Central Government and by notification in the Official Gazette specify.

“Non-Taxable Territory” means the territory which is outside the taxable territory.

Non-Banking Financial Company Non-Banking Financial Company

Non-Taxable Territory 26[Online Information and database access or retrieval services

(ccd)

Sec-65B (33) of the Finance Act, 1994

ST Rules, 1994- R.2(ccc) POP R.2(k)

Rules-

Sec-65B (35) of the Finance Act, 1994 Tax “online information and database access or Service retrieval services” means services whose Rules- R.2 (1) delivery is mediated by information technology (ccd) over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention, and impossible to ensure in the absence of information technology and includes electronic services such as,(i) advertising on the internet; (ii) providing cloud services; (iii) provision of e-books, movie, music, software and other intangibles via telecommunication networks or internet;

25. Words inserted vide the Finance Act, 2014, made effective by NN. 18/2014-ST (w.e.f. 01-10-2014).

26. Clause (ccd) with new definition inserted by NN.48/2016-ST, dated 09-11-2016 (w.e.f. 0112-2016) in Service Tax Rules. Earlier the definition was placed in Place of Provision of Services Rules, 2012. The erstwhile definition wass as follows “Online Information and

database access or retrieval services” means providing data or information, retrievable or otherwise, to any person, in electronic form through a computer network.”

Words & Expressions defined in the Act & Rules

Original Works

Original Works

Person

Person Liable to pay tax

Place Provision Point Taxation Port

of of

Principal Manufacturer

(iv) providing data or information, retrievable or otherwise, to any person, in electronic form through a computer network; (v) online supplies of digital content (movies, television shows, music, etc.); (vi) digital data storage; and (vii) online gaming;] “Original Works” means has the meaning assigned to it in Rule 2A of the Service Tax (Determination of Value) Rules, 2006. “original works” means(i) all new constructions; (ii) all types of additions and alterations to abandoned or damaged structures on land that are required to make them workable; (iii) erection, commissioning or installations of plant, machinery or equipment or structures, whether pre-fabricated or otherwise.

“Person” includes,–– (i) an individual, (ii) a Hindu undivided family, (iii) a company, (iv) a society, (v) a limited liability partnership, (vi) a firm, (vii) an association of persons or body of individuals, whether incorporated or not, (viii) Government, (ix) a local authority, or (x) every artificial juridical person, not falling within any of the preceding sub-clauses.

“Person Liable to Pay Tax” shall mean the person liable to pay service tax under section 68 of the Act or under sub-clause (d) of sub-rule (1) of rule (2) of the Service Tax Rules, 1994.

“Place of Provision” shall be the place as determined by Place of Provision of Services Rules 2012.

“Point of taxation” means the point in time when a service shall be deemed to have been provided.

“Port” has the meaning assigned to it in clause (q) of section 2 of the Major Port Trusts Act, 1963 (38 of 1963) or in clause (4) of section 3 of the Indian Ports Act, 1908 (15 of 1908).

“Principal Manufacturer” means any person who gets goods manufactured or processed on his account from another person.

A-13

N.N. 25/2012clause (y) of para 2 Clause (a) of Explanation 1 of Rule 2A of Service Tax (Determination of Value) Rules, 2006

Sec-65B (37) of the Finance Act, 1994

POP R.2(m)

Rules-

ST Rules, 1994- R.2(dd) POT Rules2(e) Sec-65B (38) of the Finance Act, 1994 N.N. 25/2012clause (z) of para 2

A-14

Service Tax Law and Practice

Print Media

28[Process

amounting to manufacture or production of goods

29[Radio

– Taxi

Recognized Sports Body

31[Recognised Sporting Event

27[“print

media” means,–– (i) “book” as defined in sub-section (1) of section 1 of the Press and Registration of Books Act, 1867 (25 of 1867), but does not include business directories, yellow pages and trade catalogues which are primarily meant for commercial purposes; (ii) “newspaper” as defined in sub-section (1) of section 1 of the Press and Registration of Books Act, 1867 (25 of 1867); “Process amounting to manufacture or production of goods” means a process on which duties of excise are leviable under section 3 of the Central Excise Act, 1944 (1 of 1944) or the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 or any process amounting to manufacture of opium, Indian hemp and other narcotic drugs and narcotics on which duties of excise are leviable under any State Act for the time being in force. (za) “radio-taxi” means a taxi including a radio cab, by whatever name called, which is in two-way radio communication with a central control office and is enabled for tracking using Global Positioning System or general Packet Radio Service (GPRS).]

“Recognized Sports Body” means - (i) the Indian Olympic Association, (ii) Sports Authority of India, (iii) a national sports federation recognised by the Ministry of Sports and Youth Affairs of the Central Government, and its affiliate federations, (iv) national sports promotion organisations recognised by the Ministry of Sports and Youth Affairs of the Central Government, (v) the International Olympic Association or a federation recognised by the International Olympic Association or (vi) a federation or a body which regulates a sport at international level and its affiliated federations or bodies regulating a sport in India.

Sec-65B (39a) of the Finance Act, 1994

N.N. 25/2012clause (ya) of para 2

N.N. 25/2012clause (za) of para 2

N.N. 25/2012clause 30[(zaa)] of para 2

“recognised sporting event” means any sporting event,- N.N. 25/2012(i) organised by a recognised sports body where clause (zab) of the participating team or individual represent para 2] any district, state, zone or country; (ii) covered under entry 11.

27. Definition of “Print Media” inserted vide the Finance Act, 2014, made effective by Notification No. 18/2014-ST, dated 25-08-2014 (w.e.f. 01-10-2104).

28. Note that prior to 31-03-2017, the same definition was provided in Section 65B(40) of the Finance Act, 1994.

29. Clause (za) inserted vide Notification No. 06/2014-ST, dated 11-07-2014 (w.e.f. 11-07-2014).

30. Erstwhile clause (za) renumbered as (zaa) vide Notification No. 06/2014-ST, dated 11-07-2014 (w.e.f. 1107-2014).

31. Clause (zab) inserted by Notification No. 06/2015-ST read with Notification No. 16/2015-ST, dated 1905-2015 (w.e.f. 01-06-2015).

Words & Expressions defined in the Act & Rules Religious Place

“Religious Place” means a place which is primarily meant N.N. 25/2012for conduct of prayers or worship pertaining to a religion, clause (zb) of meditation, or spirituality. para 2

Renting

“Renting” means allowing, permitting or granting access, entry, occupation, use or any such facility, wholly or partly, in an immovable property, with or without the transfer of possession or control of the said immovable property and includes letting, leasing, licensing or other similar arrangements in respect of immovable property.

Renting of “Renting of immovable property” means any service immovable provided or agreed to be provided by renting of property immovable property or any other service in relation to such renting.

Reserve Bank “Reserve Bank of India” means the bank established of India under section 3 of the Reserve Bank of India Act, 1934 (2 of 1934).

Residential “Residential Complex” means any complex comprising Complex of a building or buildings, having more than one single residential unit.

Rural Area “Rural Area” means the area comprised in a village as defined in land revenue records, excludingthe area under any municipal committee, municipal corporation, town area committee, cantonment board or notified area committee; or any area that may be notified as an urban area by the Central Government or a State Government.

Securities “Securities” has the meaning assigned to it in clause (h) of section 2 of the Securities Contract (Regulation) Act, 1956 (42 of 1956).

Security “Security Services” means services relating to the Services security of any property, whether movable or immovable, or of any person, in any manner and includes the services of investigation, detection or verification, of any fact or activity.

32[Senior “Senior Advocate” has the meaning assigned to it in Advocate section 16 of the Advocates Act, 1961 (25 of 1961) Service

32.

A-15

Sec-65B (41) of the Finance Act, 1994

ST Rules,1994R.2(f)

Sec-65B (42) of the Finance Act, 1994 N.N. 25/2012clause (zc) of para 2 N.N. 25/2012clause (zd) of para 2

Sec-65B (43) of the Finance Act, 1994 ST Rules,1994R.2(fa)

N.N. 25/2012clause (zdd) of para 2 “service” means any activity carried out by a person for Sec-65B (44) of another for consideration, and includes a declared service, the Finance but shall not include— Act, 1994 (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 or 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;

Clause (zdd) inserted by Notification No. 09/2016-st, dated 01-03-2016.

A-16

Service Tax Law and Practice (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.

Explanation 1.— For the removal of doubts, it is hereby declared that nothing contained in this clause shall apply to,– (A) The functions performed by the Members of Parliament, Members of State Legislative, Members of Panchayats, Members of Municipalities and Members of other local authorities who receive any consideration in performing the functions of that office as such member; or (B) the duties performed by any person who holds any post in pursuance of the provisions of the Constitution in that capacity; or (C) the duties performed by any person as a Chairperson or a Member or a Director in a body established by the Central Government or State Governments or local authority and who is not deemed as an employee before the commencement of this section.

33[Explanation 2. – For the purposes of this clause, the expression “transaction in money or actionable claim” shall not include –– (i) any activity relating to use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged; (ii) any activity carried out, for a consideration, in relation to, or for facilitation of, a transaction in money or actionable claim, including the activity carried out–– (a) by a lottery distributor or selling agent

on behalf of the State Government, in relation to promotion, marketing, organising, selling of lottery or facilitating in organising lottery of any kind, in any other manner, in accordance with the provisions of the Lotteries (Regulation) Act, 1998;” vide Section 148 of the Finance Act, 2016. (b) by a foreman of chit fund for conducting or organising a chit in any manner.]

33.

This explanation substituted by the Finance Act, 2015 (w.e.f. 14-05-2015). The erstwhile explanation read as under:-

Words & Expressions defined in the Act & Rules

A-17

Explanation 3.–– For the purposes of this Chapter,— (a) an unincorporated association or a body of persons, as the case may be, and a member thereof shall be treated as distinct persons; (b) an establishment of a person in the taxable territory and any of his other establishment in a non-taxable territory shall be treated as establishments of distinct persons.

Explanation 4.— A person carrying on a business through a branch or agency or representational office in any territory shall be treated as having an establishment in that territory.

Single Residential Unit Special Economic Zone Specified International Organization

Specified Organisation

“Single Residential Unit” means a self-contained N.N. 25/2012residential unit which is designed for use, wholly or clause (ze) of principally, for residential purposes for one family. para 2 “Special Economic Zone” has the meaning assigned to it Sec-65B (45) of Finance in clause (za) of section 2 of the Special Economic Zones the Act, 1994 Act, 2005 (28 of 2005).

"Specified International Organization" means an N.N. 25/2012international organization declared by the Central clause (zf) of Government in pursuance of section 3 of the United para 2 Nations (Privileges and Immunities) Act, 1947 (46 of 1947), to which the provisions of the Schedule to the said Act apply.

34[“specified organisation” shall mean,N.N. 25/2012(a) umaon Mandal Vikas Nigam Limited, a clause (zfa) of para 2

Government of Uttarakhand Undertaking; or (b) ‘Committee’ or ‘State Committee’ as defined in section 2 of the Haj Committee Act, 2002 (35 of 2002).]

Stage carriage

Sec-65B (46) of the Finance Act, 1994 Sec-65B (47) of the Finance Act, 1994 Sec-65B (48) of the Finance Act, 1994

State Electricity Board State Transmission Utility

“Stage carriage” shall have the meaning assigned to it in clause (40) of section 2 of Motor Vehicles Act, 1988(59 of 1988).

“State Electricity Board” means the Board constituted under section 5 of the Electricity (Supply) Act, 1948 (54 of 1948).

“State Transmission Utility” shall have the meaning assigned to it in clause (67) of section 2 of the Electricity Act, 2003 (36 of 2003).

State Transport Undertaking

"State Transport Undertaking" has the meaning assigned N.N. 25/2012to it in clause (42) of section 2 of the Motor Vehicles Act, clause (zg) of para 2 1988 (59 of 1988).

Explanation2.–– For the purposes of this clause, transaction in money shall not include, any activity relating to the use of money or its conversion by cash or any other mode, from one form, currency or denomination to another form, currency or denomination for which a separate consideration is charged: 34. Clause (zfa) inserted vide Notification No. 17/2014-ST, dated 20-08-2014 (w.e.f. 20-08-2014).

A-18

Service Tax Law and Practice

"Sub-Broker" has the meaning assigned to it in sub-clause (gc) of clause 2 of the Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992.

Supply of “Supply of Manpower” means supply of manpower, Manpower temporarily or otherwise, to another person to work under his superintendence or control.

35[Support “Support Services” means infrastructural, operational, Services administrative, logistic, marketing or any other support of any kind comprising functions that entities carry out in ordinary course of operations themselves but may obtain as services by outsourcing from others for any reason whatsoever and shall include advertisement and promotion, construction or works contract, renting of immovable property, security, testing and analysis.

Taxable service “Taxable service” means any service on which service tax is leviable under section 66B. Sub-Broker

Taxable Territory Telecommunic ation service

36[Tiger Reserve

Tour Operator

Trade Union Vessel 37[Wildlife Sanctuary

35.

36.

37.

N.N. 25/2012clause (zh) of para 2 S.T Rules, 1994- R.2(g) Sec-65B (49) of the Finance Act, 1994

Sec-65B (51) of the Finance Act, 1994 “Taxable Territory” means the territory to which the Sec-65B (52) of provisions of this Chapter apply. the Finance Act, 1994 “Telecommunication Service” means service of any POP Rulesdescription (including electronic mail, voice mail, data R.2(q) services, audio text services, video text services, radio paging and cellular mobile telephone services) which is made available to users by means of any transmission or reception of signs, signals, writing, images and sounds or intelligence of any nature, by wire, radio, visual, or other electromagnetic means but shall not include broadcasting services. ‘(zi) “tiger reserve” has the meaning assigned to it in N.N. 25/2012clause (e) of section 38K of the Wild Life (Protection) clause (zi) of Act, 1972 (53 of 1972); para 2 “Tour Operator” means any person engaged in the business of planning, scheduling, organizing, arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours “Trade Union” has the meaning assigned to it in clause (h) of section 2 of the Trade Unions Act,1926(16 of 1926).

“Vessel” has the meaning assigned to it in clause (z) of section 2 of the Major Port Trusts Act, 1963 (38 of 1963).

N.N. 26/2012clause (c) of para 2

N.N. 25/2012clause (zj) of para 2 Sec-65B (53) of the Finance Act, 1994 “wildlife sanctuary” means sanctuary as defined in the N.N. 25/2012clause (26) of the section 2 of The Wild Life clause (zk) of (Protection) Act, 1972 (53 of 1972) para 2

The shaded clause regarding ‘support services’ omitted vide the Finance Act, 2015 w.e.f. 01-04-2016.

The clause (zi) inserted by Notification No. 06/2015-ST (w.e.f. 01-04-2015).

The clause (zk) inserted by Notification No. 06/2015-ST (w.e.f. 01-04-2015).

Words & Expressions defined in the Act & Rules

A-19

Works Contract

“Works Contract” means a contract wherein transfer of Sec-65B (54) of property in goods involved in the execution of such the Finance contract is leviable to tax as sale of goods and such Act, 1994 contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such property.

38[Zoo

“zoo” has the meaning assigned to it in the clause (39) of N.N. 25/2012the section 2 of the Wild Life (Protection) Act, 1972 (53 clause (zl) of para 2 of 1972).

* POP Rules = Point of Provision of Services Rules, 2012 * ST Rules = Service Tax Rules, 1994 * POT Rules = Point of Taxation Rules, 2011 ___________

38.

The clause (zl) inserted by Notification No. 06/2015-ST (w.e.f. 01-04-2015).

Table 2 Exemptions available in Service Tax Nature of Service/ Entity providing or receiving service

Exemption

UN/International Organisation

Services provided to the United Nations or a specified international organization.

[N.N. 25/2012-ST, Entry No. 1] 2[(i) Health care services by a clinical establishment, an Health Care Services authorised medical practitioner or para-medics; (ii) Services provided by way of transportation of a patient in an ambulance, other than those specified in (i) above;] [N.N. 25/2012-ST, Entry No. 2] Cord blood banks 3[Services provided by cord blood banks by way of preservation of stem cells or any other service in relation to such preservation.]

[N.N. 25/2012-ST, Entry No. 2A] Operators of Bio- 4[Services provided by operators of the Common BioMedical Waste medical Waste Treatment Facility to a clinical Treatment establishment by way of treatment or disposal of bioFacility medical waste or the processes incidental thereto.]

[N.N. 25/2012-ST, Entry No. 2B] Health Care of Services by a veterinary clinic in relation to health care of Animals or Birds animals or birds.

[N.N. 25/2012-ST, Entry No. 3] Entity registered Services by an entity registered under section 12AA of the Income Tax Act, 1961 by way of charitable activities. under Section 12AA of the IT Act [N.N. 25/2012-ST, Entry No. 4] Renting of Services by a person by way of 5[renting of precincts of a Religious Place religious place meant for general public, owned or managed by an entity registered as a charitable or religious trust under section 12AA of the Income-tax Act, 1961 (hereinafter referred to as the Income-tax Act), or a trust or

Reference to E.G. * 7.1

7.2

__

__

7.3

7.4

7.5

* E.G. refers to “Taxation of Services: An Education Guide” released by the Government released on 20-062012.

2. Entry 2 substituted by Notification No. 06/2015-ST, dated 01-03-2015 (w.e.f. 01-04-2015). The earlier entry read as follows: “Health care services by a clinical establishment, an authorised medical practitioner or para-medics” 3. Entry 2A inserted by Notification No. 4/2014-ST, dated 17-02-2014 (w.e.f. 17-02-2014).

4. Entry 2B inserted by Notification No. 6/2014-ST, dated 11-07-2014 (w.e.f. 11-07-2014).

5. The entry substituted vide Notification No. 40/2016-ST, dated 06-09-2016 (w.e.f. 06-09-2016). The earlier entry 5(a) was read as follows: “renting of precincts of a religious place meant for general public” Also, reference to Circular No. 200/10/2016, dated 22-08-2016, the term ‘precincts of religious place’ to be interpreted broadly for exemption at Sl. No. 5(a).

[ A-21 ]

A-22

Service Tax Law and Practice

Nature of Service/ Entity providing or receiving service

Conduct of Religious Ceremony

Exemption

an institution registered under sub clause (v) of clause (23C) of section 10 of the Income-tax Act or a body or an authority covered under clause (23BBA) of section 10 of the Income-tax Act.] [N.N. 25/2012-ST, Entry No. 5(a)] Services by a person by way of conduct of any religious ceremony.

[N.N. 25/2012-ST, Entry No. 5(b)]

Services relating to 6[Services by a specified organisation in respect of a Religious religious pilgrimage facilitated by the Ministry of Pilgrimage External Affairs of the Government of India, under

Reference to E.G. *

7.5

__

bilateral arrangement.]

Services provided by an Arbitral Tribunal

[N.N. 25/2012-ST, Entry No. 5A] Services provided by an arbitral tribunal to (a) any person other than a business entity; or (b) a business entity with a turnover up to rupees ten lakh in the preceding financial year.

[N.N. 25/2012-ST, Entry No. 6(a)]

Services provided 7[a partnership firm of advocates or an individual as an by an individual as advocate other than a senior advocate, by way of an Advocate or a legal services toPartnership Firm (i) an advocate or partnership firm of advocates of advocates providing legal servies;

7.6

7.6

(ii) any person other than a business entity; or (iii) a business entity with a turnover up to rupees in the preceding financial year; or [N.N. 25/2012-ST, Entry No. 6(b)] Services provided by a Sr. Advocate

6.

7.

8[Services

provided by a senior advocate by way of legal services to(i) any person other than a business entity; or (ii) a business entity with a turnover up to rupees ten lakh

__

Entry 5A inserted by Notification No. 17/2014-ST, dated 20-08-2014 (w.e.f. 20-08-2014).

Entry 6 (b) substituted by Notification No. 09/2016-ST, dated 01-03-2016 (w.e.f. 01-04-2016). The erstwhile clause read as follows:-“ (b) an individual as an advocate or a partnership firm of advocates by way of legal services to,(i) an advocate or partnership firm of advocates providing legal services ; (ii) any person other than a business entity; or

(iii) a business entity with a turnover up to rupees ten lakh in the preceding financial year; The Delhi High Court in the case of Delhi Bar Association v. UOI, has stayed the operation of this clause amendment till the next date of hearing (i.e. 27-09-2016).

8. Entry 6(c) substituted by Notification No. 32/2016-ST, dated 06-06-2016 (w.e.f. 06-06-2016). The erstwhile clause read as follows:- “(c) Services provided by a senior advocate by way of legal services to a person other than a person ordinarily carrying out any activity relating to industry, commerce or any business or profession.”

Exemptions available in Service Tax Nature of Service/ Entity providing or receiving service

Exemption

in the preceding financial year;] [N.N. 25/2012-ST, Entry No. 6(c )] Services provided 9[Services provided by a person represented on an arbitral by a person on an tribunal to an arbitral tribunal.

Arbitral Tribunal [N.N. 25/2012-ST, Entry No. 6(c )] Technical Testing 10[Services by way of technical testing or analysis of newly or Analysis of developed drugs, including vaccines and herbal remedies, Newly Developed on human participants by a clinical research organisation Drugs approved to conduct clinical trials by the Drug Controller General of India.]

[N.N. 25/2012-ST, Entry No. 7] Training or Services by way of training or coaching in recreational Coaching for Art, activities relating to arts, culture or sports.

Culture or Sports [N.N. 25/2012-ST, Entry No. 8] Services provided 11[Services provided. – by or to an (a) by an educational institution to its students, faculty Educational and staff; Institution (b) to an educational institution, by way of,(i) transportation of students, faculty and staff; (ii) catering, including any mid-day meals scheme sponsored by the Government; (iii) security or cleaning or house-keeping services performed in such educational institution; (iv) services relating to admission to, or conduct of examination by, such institution;]

A-23 Reference to E.G. *

7.6

__

7.7.1

4.12.5

12[Provided that nothing contained in clause (b) of this entry shall apply to an educational institution other than an institution providing services by way of preschool education and education up to higher secondary school or equivalent;]

[N.N. 25/2012-ST, Entry No. 9] Services provided by specified Institution providing

13[Any

services provided by,

__

(i) the National Skill Development Corporation set up by the Government of India; (ii) a Sector Skill Council approved by the National

9.

10.

11.

Entry 6(c) omitted vide NN. 09/2016-ST, dated 01-03-2016 (w.e.f. 01-04-2016).

Entry 7 omitted vide NN. 06/2014-ST, dated 11-07-2014 (w.e.f. 11-07-2014).

The New entry 9 substituted the erstwhile entry 9 by Notification No. 06/2014-ST, dated 11-07-2014 (w.e.f. 11-07-2014). The erstwhile entry read as under:9. Services provided to an educational institution in respect of education exempted from service tax, by way of,(a) auxiliary educational services; or (b) renting of immovable property;” 12. Proviso inserted vide Notification No. 10/2017-ST, dated 08-03-2017 (w.e.f. 01-04-2017).

13. Entry ‘9A’ inserted by Notification No. 13/2013-ST, dated 10-09-2013 (w.e.f. 10-09-2013).

A-24 Nature of Service/ Entity providing or receiving service specified skills

Service Tax Law and Practice Exemption

Reference to E.G. *

Skill Development Corporation; (iii) an assessment agency approved by the Sector Skill Council or the National Skill Development Corporation; (iv) a training partner approved by the National Skill Development Corporation or the Sector Skill Council in relation to (a) the National Skill Development Programme implemented by the National Skill Development Corporation; or (b) a vocational skill development course under the National Skill Certification and Monetary Reward Scheme; or (c) any other Scheme implemented by the National Skill Development Corporation.]

[N.N. 25/2012-ST, Entry No. 9A] Services provided by the Indian Instituted of Management, provided by IIM to as per the guidelines of the Central Government, to their their students for students, by way of the following educations programmes, except Executive Development Programme, the specified courses (a) two year full time 15[***] Post Graduate Programmes in Management, for the Post Graduate Diploma in Management, to which admissions are made on the basis of Common Admission Test (CAT), conducted by Indian Institute of Management; 14[Services

__

(b) fellow programme in Management; (c) five year integrated programme in Management.; [N.N. 25/2012-ST, Entry No. 9B] of Services of assessing bodies empanelled centrally by specified bodies Directorate General of Training, Ministry of Skill under SDI Scheme Development and Entrepreneurship by way of assessments under Skill Development Initiative (SDI) Scheme.

[N.N. 25/2012-ST, Entry No. 9C] 17[ Services by Services provided by training providers (Project specific agencies implementation agencies) under Deen Dayal Upadhyaya Grameen Kaushalaya Yojana under the Ministry of Rural under specified Development by way of offering skill or vocational training scheme of Ministry of Rural courses certified by National Council for Vocational Development Training.

16[Services

__

__

14. Entry ‘9B’ inserted by NN. 09/2016-ST, dated 01-03-2016 (w.e.f. 01-04-2016) 15. The word “residential” omitted by NN. 07/2017-ST, dated 02-02-2017 (w.e.f. 02-02-2017) 16. Entry ‘9C inserted by NN. 09/2016-ST, dated 01-03-2016 (w.e.f. 01-04-2016).

17. Entry ‘9D’ inserted by NN. 09/2016-ST, dated 01-03-2016 (w.e.f. 01-04-2016).

Exemptions available in Service Tax Nature of Service/ Entity providing or receiving service

Exemption

A-25 Reference to E.G. *

[N.N. 25/2012-ST, Entry No. 9D] Sports – Services to a recognised Sports Body

Sports – Sponsorship of Sporting Events Organized

19[Services provided to the Government or Local or Governmental Authority – Civil Structure or any other Original Works Services provided to the Government or Local or Governmental Authority – Historical Monument, Archaeological site etc.

20[Services provided to Government or Local or Governmental Authority – Education/Health

18.

19.

20.

Services provided to a recognized sports body by– (a) an individual as a player, referee, umpire, coach or team manager for participation in a sporting event organized by a recognized sports body; (b) another recognized sports body.

[N.N. 25/2012-ST, Entry No. 10] Services by way of sponsorship of sporting event organized – (a) by a national sports federation, or its affiliated federations, where the participating teams or individuals represent any 18[district, State, zone or Country]; (b) by Association of Indian Universities, Inter-University Sports Board, School Games Federation of India, All India Sports Council for the Deaf, Paralympic Committee of India, Special Olympics Bharat; (c) by Central Civil Services Cultural and Sports Board; (d) as part of national games, by Indian Olympic Association(e) under Panchayat Yuva Kreeda Aur Khel Abhiyaan (PYKKA) Scheme.

[N.N. 25/2012-ST, Entry No. 11] Services provided to the Government or local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out , repair, maintenance, renovation or alteration of a civil structure or any other original works meant predominantly for use other than for commercial, industry, or any other business or profession.

[N.N. 25/2012-ST, Entry No. 12(a)] Services provided to the Government or local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out , repair, maintenance, renovation or alteration of a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under Ancient Monuments and Archaeological Sites and Remains Act, 1958.

[N.N. 25/2012-ST, Entry No. 12(b)] Services provided to the Government or local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out , repair, maintenance, renovation or alteration of a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment.

[N.N. 25/2012-ST, Entry No. 12(c)]

Substituted for the words ‘district, state or zone’ by NN. 1/2014-ST (w.e.f. 10-01-2014).

The Entry 12 (a) omitted by NN. 06/2015-ST, dated 01-03-2015 (w.e.f. 01-04-2015).

The entry 12 (c) omitted by NN. 06/2015-ST, dated 01-03-2015 (w.e.f. 01-04-2015).

7.8.1

__

7.9.2]

7.9.1

7.9.1]

A-26

Service Tax Law and Practice

Nature of Service/ Entity providing or receiving service / Art or Cultural Establishment Services provided to Government or Local or Governmental Authority – Canal, Dam or other Irrigation Works Services provided to Government or Local or Governmental Authority – Water Supply or Sewage Treatment or Disposal 21[Services provided to the Government or Local or Governmental Authority – Residential Complex 22[ Erection, Construction, Maintenance, Repair, Alteration, Renovation or Alteration – provided to the Government or Local or Governmental Authority for contracts entered prior to 01st March 2015.

21.

22.

Exemption

Reference to E.G. *

Services provided to the Government or local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of canal, dam or other irrigation works.

[N.N. 25/2012-ST, Entry No. 12(d)]

7.9.1

Services provided to the Government or local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of pipeline, conduit or plant for (i) water supply (ii) water treatment; or (iii) sewerage treatment or disposal.

[N.N. 25/2012-ST, Entry No. 12(e)]

7.9.1

Services provided to the Government or local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out , repair, maintenance, renovation or alteration of a residential complex predominantly meant for self-use or the use of their employees or other persons specified in the Explanation 1 to clause 44 of section 65B of the said Act. [N.N. 25/2012-ST, Entry No. 12(f)] Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of –

7.9.1]

(a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession, (b) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment; or (c) a residential complex predominantly meant for selfuse or the use of their employees or other persons specified in the Explanation 1 to clause (44) of section 65 B of the said Act; under a contract which had been entered into prior to the 1st March, 2015 and on which appropriate stamp duty, where applicable, had been paid prior to such date: Provided that nothing contained in this entry shall apply on or after the 1st April, 2020;

The entry 12 (f) omitted by NN. 06/2015-ST, dated 01-03-2015 (w.e.f. 01-04-2015).

Entry ‘12A’ inserted by NN. 09/2016-ST, dated 01-03-2016 (w.e.f. 01-03-2016).

__

Exemptions available in Service Tax Nature of Service/ Entity providing or receiving service

Exemption

Erection, Construction, Maintenance, Repair, Alteration, Renovation or Alteration – For use of General Public Erection, Construction, Maintenance, Repair, Alteration, Renovation or Alteration – Jawarharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana 23[Erection, Construction, Maintenance, Repair, Alteration, Renovation or Alteration – In-situ rehabilitation of existing slum dewellers

Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a road, bridge, tunnel, or terminal for road transportation for use by general public.

A-27 Reference to E.G. *

[N.N. 25/2012-ST, Entry No. 12A]

24[Erection, Construction, Maintenance, Repair, Alteration, Renovation or Alteration – Beneficiary led individual house construction/ enhancement Erection, Construction, Maintenance, Repair, Alteration,

23.

24.

__

[N.N. 25/2012-ST, Entry No. 13(a)] Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works pertaining to a scheme under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana.

[N.N. 25/2012-ST, Entry No. 13(b)]

__

Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works pertaining to the ‘In-situ rehabilitation of existing slum dwellers using land as a resource through private participation’ under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana, only for existing slum dwellers.

[N.N. 25/2012-ST, Entry No. 13(ba)] Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works pertaining to the ‘Beneficiary-led individual house construction / enhancement under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana’.

__

__

[N.N. 25/2012-ST, Entry No. 13(bb)] Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a building owned by an entity registered under section 12 AA of the Income

7.9.5

The items ‘(ba)’ in entry 13 inserted by NN. 09/2016-ST, dated 01-03-2016 (w.e.f. 01-03-2016).

The items ‘(bb)’ in entry 13 inserted by NN. 09/2016-ST, dated 01-03-2016 (w.e.f. 01-03-2016).

A-28

Service Tax Law and Practice

Nature of Service/ Entity providing or receiving service

Exemption

Renovation or Restoration – For Entity Registered under 12AA Erection, Construction, Maintenance, Repair, Alteration, Renovation or Restoration – Pollution control or effluent treatment plant

tax Act, 1961(43 of 1961) and meant predominantly for religious use by general public.

[N.N. 25/2012-ST, Entry No. 13(c)]

Erection, Construction, Maintenance, Repair, Alteration, Renovation or Restoration – Structure meant for funeral, burial or cremation of deceased Erection, Construction or Installation Original Works – Airport, Port etc.

Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a pollution control or effluent treatment plant, except located as a part of a factory.

[N.N. 25/2012-ST, Entry No. 13(d)] Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a structure meant for funeral, burial or cremation of deceased [N.N. 25/2012-ST, Entry No. 13(d)]

Services by way of construction, erection, commissioning or installation of original works pertaining to 25[***] 26[railways, excluding monorail and metro.

Explanation.- The services by way of construction, erection, commissioning or installation of original works pertaining to monorail or metro, where contracts were entered into before 1st March, 2016, on which appropriate stamp duty, was paid, shall remain exempt.]

[N.N. 25/2012-ST, Entry No. 14(a)] Erection, Services by way of construction, erection, commissioning Construction or or installation of original works pertaining to a single Original Works – residential unit otherwise than as a part of a residential Single Residential complex.

Unit [N.N. 25/2012-ST, Entry No. 14(b)] Erection, Services by way of construction, erection, commissioning or installation of original works pertaining to low- cost Construction or houses up to a carpet area of 60 square metres per house in Original Works – Low Cost Houses a housing project approved by competent authority 25.

26.

Reference to E.G. *

__

__

__

__

__

The words “an airport, port or” omitted vide NN. 06/2015-ST, dated 01-03-2015 (w.e.f. 01-04-2015).

The item (a) in entry 14 substituted by NN. 09/2016-ST, dated 01-03-2016 (w.e.f. 01-03-2016). The earlier item was read as follows: “(a) railways, including monorail and metro”.

Exemptions available in Service Tax Nature of Service/ Entity providing or receiving service

27Erection, Construction or Original Works – Specified house project

Erection, Construction or Original Works – Storage of Agricultural Produce Erection, Construction or Original Works – Mechanized Food Grain Handling Systems 28Erection, Construction or Original Works contracts entered prior to 01-03-2015 – Airport or port

Exemption

empowered under the ‘Scheme of Affordable Housing in Partnership’ framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India.

[N.N. 25/2012-ST, Entry No. 14(c)] Services by way of construction, erection, commissioning or installation of original works pertaining to low cost houses up to a carpet area of 60 square meters per house in a housing project approved by the competent authority under: (i) the “Affordable Housing in Partnership” component of the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana; (ii) any housing scheme of a State Government.

[N.N. 25/2012-ST, Entry No. 14(ca)] Services by way of construction, erection, commissioning or installation of original works pertaining to post- harvest storage infrastructure for agricultural produce including a cold storages for such purposes.

[N.N. 25/2012-ST, Entry No. 14(d)]

Reference to E.G. *

__

__

Services by way of construction, erection, commissioning or installation of original works pertaining to mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages.

[N.N. 25/2012-ST, Entry No. 14(e)]

7.9.9

Services by way of construction, erection, commissioning, or installation of original works pertaining to an airport or port provided under a contract which had been entered into prior to 1st March, 2015 and on which appropriate stamp duty, where applicable, had been paid prior to such date: Provided that Ministry of Civil Aviation or the Ministry of Shipping in the Government of India, as the case may be, certifies that the contract had been entered into before the 1st March, 2015: Provided further that nothing contained in this entry shall apply on or after the 1st April, 2020.

__

[N.N. 25/2012-ST, Entry No. 14A]

27.

28.

A-29

The item (ca) in entry 14 inserted by NN. 09/2016-ST, dated 01-03-2016 (w.e.f. 01-03-2016).

The entry 14A inserted by NN. 09/2016-ST, dated 01-03-2016 (w.e.f. 01-03-2016).

A-30

Service Tax Law and Practice

Nature of Service/ Entity providing or receiving service

Exemption

29[Services provided by way of temporary transfer of Temporary permitting the use of enjoyment of a copyright;Transfer or Permitting the use a (a) covered under clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957 (14 of 1957), relating to copyright original literary, dramatic, musical or artistic works; or (b) of cinematograph films for exhibition in a cinema hall or cinema theatre.]

[N.N. 25/2012-ST, Entry No. 15] 30[Services by an artist by way of a performance in folk or Services by Performing Artist classical art forms of (i) music, or (ii)dance, or (iii)theatre, if the consideration charged for such performance is not more than 31[one lakh and fifty thousand rupees]: Provided that the exemption shall not apply to service provided by such artist as a brand ambassador.]

[N.N. 25/2012-ST, Entry No. 16] Services of Services by way of collecting or providing news by an Collecting and independent journalist, Press Trust of India or United News of India.

Providing News [N.N. 25/2012-ST, Entry No. 17] 32[Services by a hotel, inn. Guest house, club or campsite, Short Term Accommodation- by whatever name called, for residential or lodging purposes, having declared tariff of a unit of accommodation Tariff Below Rs. below one thousand rupees per day or equivalent.]

1,000/[N.N. 25/2012-ST, Entry No. 18] 33[Services provided in relation to serving of food or Restaurant Services beverages by a restaurant, eating joint or a mess, other than those having the facility of air-conditioning or central airheating in any part of the establishment, at any time during the year.]

[N.N. 25/2012-ST, Entry No. 19]

29.

30.

31.

32.

33.

Reference to E.G. * 7.10.1

7.11.1

__

7.11.3

8.4.1

The Entry No. 15 substituted by Notification No. 03/2013-ST, dated 01-03-2013 (w.e.f. 01-04-2013).

Hence, from 1st April onwards, the exemption relating to cinematograph films will be restricted to exhibition of the films in a cinema hall or a cinema theatre.

The Entry 16 substituted by Notification No. 06/2015-ST, dated 01-03-2015 (w.e.f. 01-04-2015). The earlier entry read as under:“Services by a performing artist in folk or classical art forms of (i) music, or (ii) dance, or (iii) theatre, excluding services provided by such artist as a brand ambassador.”

Substituted for the words “one lakh rupees” by NN. 09/2016-ST, dated 01-03-2016 (w.e.f. 01-04-2016).

The New entry 18 substituted the erstwhile entry 18 by Notification No. 06/2014-ST, dated 11-07-2014 (w.e.f. 11-07-2014). The erstwhile entry read as under:“Services by way of renting of a hotel, inn, guest house, club, campsite or other commercial places meant for residential or lodging purposes, having declared tariff of a unit of accommodation below rupees one thousand per day or equivalent;” The Entry No. 19 substituted by Notification No. 03/2013-ST, dated 01-03-2013 (w.e.f. 01-04-2013).

Thus the exemption to restaurants has become narrower in scope and service tax shall be levied on air conditioned or centrally air heated restaurants.

Exemptions available in Service Tax Nature of Service/ Entity providing or receiving service Canteen Services

35[Transportation

by Rail or Vessels – Petroleum Products

Transportation by Rail or Vessels – Goods for Reliefs

Exemption

Reference to E.G. *

34[Services provided in relation to serving of food or beverages by a canteen maintained in a factory covered under the Factories Act, 1948 (63 of 1948), having the facility of air-conditioning or central air-heating at any time during the year.]

[N.N. 25/2012-ST, Entry No. 19A] Services by way of transportation by rail or a vessel from one place in India to another of the petroleum and petroleum products falling under Chapter heading 2710 and 2711 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986).]

[N.N. 25/2012-ST, Entry No. 20(a)] Services by way of transportation by rail or a vessel from one place in India to another of the relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap.

[N.N. 25/2012-ST, Entry No. 20(b)] Services by way of transportation by rail or a vessel from one place in India to another of the defence or military equipments.

[N.N. 25/2012-ST, Entry No. 20(c)]

__

Transportation by Rail or Vessels – Defence or Military Equipments 36[Transportation Services by way of transportation by rail or a vessel from

by Rail or Vessels one place in India to another of the postal mail or mail – Postal Mails etc. bags.

[N.N. 25/2012-ST, Entry No. 20(d)] Transportation by Services by way of transportation by rail or a vessel from one place in India to another of the household effects.]

Rail or Vessels – Household effects.

[N.N. 25/2012-ST, Entry No. 20(e)] Transportation by Services by way of transportation by rail or a vessel from one place in India to another of the newspaper or Rail or Vessels – magazines registered with the Registrar of Newspapers.

Newspaper etc.

[N.N. 25/2012-ST, Entry No. 20(f)] Transportation by Services by way of transportation by rail or a vessel from one place in India to another of the railway equipments or Rail or Vessels – materials.

Railway Equipments etc.

[N.N. 25/2012-ST, Entry No. 20(g)]

34.

35.

36.

A-31

__

__

__

__

__

__

__

Entry 19A inserted by Notification No.14/2013-ST, dated 22-10-2013 (w.e.f. 22-10-2013).

The entry no. 20(a) omitted by Notification No. 03/2013-ST, dated 01-03-2013 (w.e.f. 01-04-2013). The objective of withdrawing this exemption has been given as harmonisation of exemption with the exemptions available to GTA. The entries no. 20(d) & (e) omitted by Notification No. 03/2013-ST, dated 01-03-2013 (w.e.f. 01-042013). The objective of withdrawing this exemption has been given as harmonisation of exemption with the exemptions available to GTA.

A-32

Service Tax Law and Practice

Nature of Service/ Entity providing or receiving service

Exemption

Reference to E.G. *

Services by way of transportation by rail or a vessel from one place in India to another of the agricultural produce.

[N.N. 25/2012-ST, Entry No. 20(h)]

__

Services by way of transportation by rail or a vessel from one place in India to another of the 37[milk, salt and food grain including flours, pulses and rice] [N.N. 25/2012-ST, Entry No. 20(i)] Transportation by Services by way of transportation by rail or a vessel from one place in India to another of the 38[chemical fertilizer, Rail or Vessels – organic manure and oilcakes].

Fertilizer etc.

[N.N. 25/2012-ST, Entry No. 20(j)] Transportation by 39[Services by way of transportation by rail or a vessel from one place in India to another of the cotton, ginned or Rail or Vessels – baled].

Cotton etc.

[N.N. 25/2012-ST, Entry No. 20(k)] GTA Exemption – 40[ Services provided by a goods transport agency, by way of transport in a goods carriage of,Specified Commodities/Mone (a) agricultural produce; tary Limits (b) goods, where gross amount charged for the transportation of goods on a consignment transported in a single carriage does not exceed one thousand five hundred rupees; (c) goods, where gross amount charged for transportation of all such goods for a single consignee does not exceed rupees seven hundred fifty; 41[(d) milk, salt and food grain including flours, pulses

__

Transportation by Rail or Vessels – Agricultural Produce Transportation by Rail or Vessels – Foodstuff etc.

37.

38.

39.

40.

__

__

4.16.1

The item (i) in entry 20 substituted by Notification No. 06/2015-ST, dated 01-03-2015 (w.e.f. 01-042015). The earlier item read as follows:- “foodstuff including flours, tea, coffee, jaggery, sugar, milk products, salt and edible oil, excluding alcoholic beverages.”

The item (j) in entry 20 substituted by Notification No. 06/2014-ST, dated 11-07-2014 (w.e.f. 11-072014). The erstwhile item read as follows :- “(j) chemical fertilizer and oilcakes;” The item (k) in entry 20 inserted by Notification No. 06/2014-ST, dated 11-07-2014 (w.e.f. 11-07-2014).

Substituted by the new entry 21 by Notification No.3/2013-ST, dated 01-03-2013(w.e.f. 01-04-2013).

The erstwhile entry is as under:“Services provided by a goods transport agency by way of(a) transportation of fruits, vegetables, eggs, milk, food grains or pulses in a goods carriage. (b) goods, where gross amount charged for the transportation of goods on a consignment transported in a single goods carriage does not exceed one thousand five hundred rupees; or

41.

(c) goods, where gross amount charged for transportation of all such goods for a single consignee in the goods carriage does not exceed rupees seven hundred fifty.”

Item (d) in entry 21 substituted by Notification No. 06/2015-ST, dated 01-03-2015 (w.e.f. 01-04-2015).

The earlier item read as follows:- “foodstuff including flours, tea, coffee, jaggery, sugar, milk products, salt and edible oil, excluding alcoholic beverages.”

Exemptions available in Service Tax Nature of Service/ Entity providing or receiving service

Exemption

and rice;]; chemical fertilizer, organic manure and oilcakes;] (f) newspaper or magazines registered with the Registrar of Newspapers; (g) relief materials meant for victims of natural or manmade disasters, calamities, accidents or mishap; or (h) defense or military equipments.]

43[(i) cotton, ginned or baled.]

[N.N. 25/2012-ST, Entry No. 21] Services by way of giving on hire to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers.

[N.N. 25/2012-ST, Entry No. 22(a)] Services by way of giving on hire to a goods transport agency, a means of transportation of goods.

[N.N. 25/2012-ST, Entry No. 22(b)] Transport of passengers, with or without accompanied belongings, by air, embarking from or terminating in an airport located in the state of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, or Tripura or at Bagdogra located in West Bengal.

[N.N. 25/2012-ST, Entry No. 23(a)] Transport of passengers, with or without accompanied belongings, by a 44[non-airconditioned contract carriage other than radio taxi, for transportation of passengers, excluding tourism, conducted tour, charter or hire.]

[N.N. 25/2012-ST, Entry No. 23(b)] Transport of passengers, with or without accompanied belongings, by stage carriage other than air-conditioned stage carriage.

[N.N. 25/2012-ST, Entry No. 23(bb)] Transport of passengers, with or without accompanied belongings, by ropeway, cable car or aerial tramway.

[N.N. 25/2012-ST, Entry No. 23(c)]

A-33 Reference to E.G. *

42[(e)

Supply of Tangible GoodsState Transport Undertaking Supply of Tangible GoodsGTA Transport of Passengers Specified States/Areas

Transport of Passengers – Contract Carriage

45[ Transport of Passengers –NonAir conditioned stage carriage.

46[Transport of Passengers – Ropeway, Cable Car or Aerial

42.

43.

44.

45.

46.

__

__

__

6.11.6

__

__

The item (e) in entry 21 substituted by Notification No. 06/2014-ST, dated 11-07-2014 (w.e.f. 11-072014). The erstwhile item read as follows:- “(e) chemical fertilizer and oilcakes;” The item (i) in entry 21 inserted by Notification No. 06/2014-ST, dated 11-07-2014 (w.e.f. 11-07-2014) The item (b) in entry 23 substituted by Notification No. 06/2014-ST, dated 11-07-2014 (w.e.f. 11-072014). The erstwhile item read as follows:- “(b) a contract carriage for the transportation of passengers, excluding tourism, conducted tour, charter or hire; or” The clause (bb) in entry 23 inserted vide by NN. 09/2016-ST, dated 01-03-2016 (w.e.f. 01-06-2016).

The clause (c) omitted by NN. 09/2016-ST, dated 01-03-2016 (w.e.f. 01-04-2016).

A-34

Service Tax Law and Practice

Nature of Service/ Entity providing or receiving service

Exemption

Reference to E.G. *

Services provided to the Government by way of transport of passengers, with or without accompanied belongings, by air, embarking from or terminating at a Regional Connectivity Scheme Airport, against consideration in the form of Viability Gap Funding (VGF):

__

Tramway 47[Air Travel Service provided

by Regional Airports

Provided that nothing contained in this entry shall apply on or after the expiry of a period of one year from the date of commencement of operations of the Regional Connectivity Scheme Airport as notified by the Ministry of Civil Aviation.]

[N.N. 25/2012-ST, Entry No. 23A] 48[Parking – [Services by way of vehicle parking to general public Vehicle excluding leasing of space to an entity for providing such parking facility.]

[N.N. 25/2012-ST, Entry No. 24] Services Provided Services provided to Government, a local authority or a to the Government governmental authority by way of 49[water supply, public or Local health, sanitation conservancy, solid waste management or Authority – Water slum improvement and up-gradation.]

Supply, Public [N.N. 25/2012-ST, Entry No. 25(a)] Health etc Services Provided Services provided to Government, a local authority or a to Government or governmental authority by way of repair or maintenance of Local authority – 50[a vessel].

Repair of Ship/Boat [N.N. 25/2012-ST, Entry No. 25(b)] General Insurance Services of general insurance business provided under the Services- Specified specified schemes.

Insurance Schemes [N.N. 25/2012-ST, Entry No. 26] 51[Life Insurance Services of Life Insurance business provided under the Services- Specified schemes of Janashree Bima yojna, Aam Admi Bima yojna, Insurance Schemes 52[Varishtha Pension Bima Yojana], 53[Pradhan Mantri

47.

48.

49.

50.

51.

__

7.3.4

__

__

__

The entry inserted by NN. 07/2017-ST, dated 02-02-2017 (w.e.f. 02-02-2017).

The entry no. 24 omitted by Notification No. 03/2013-ST, dated 01-03-2013 (w.e.f. 01-04-2013).

The item (a) in entry 25 substituted by Notification No. 06/2014-ST, dated 11-07-2014 (w.e.f. 11-072014). The erstwhile item read as under:“(a) carrying out any activity in relation to any function ordinarily entrusted to a municipality in relation to water supply, public health, sanitation conservancy, solid waste management or slum improvement and upgradation; or” The words “a vessel or an aircraft” substituted by the words “a vessel” by Notification No. 03/2013-ST, dated 01-03-2013 (w.e.f. 01-04-2013).

Exemption has been granted to these services vide NN. 49/2012-ST (w.e.f. 24-12-2012).

Exemptions available in Service Tax Nature of Service/ Entity providing or receiving service

Exemption

A-35 Reference to E.G. *

Jeevan Jyoti Bima Yojna, Pradhan Mantri Jan Dhan Yojna].

[N.N. 25/2012-ST, Entry No. 26A(a),(b, (e) &(f)] 54[Life MicroServices of life micro-insurance product as approved by Insurance Services the Insurance Regulatory and Development Authority, having maximum amount of cover of fifty thousand rupees.

[N.N. 25/2012-ST, Entry No. 26A(c)] 55[Specified Services by way of collection of contribution under Atal support service Pension Yojna (APY).

[N.N. 25/2012-ST, Entry No. 26B] 56[Life insurance Services of life insurance business provided by way of policies – Annuity annuity under the National Pension System regulated by under NPS Pension Fund Regulatory and Development Authority of India (PFRDA) under the Pension Fund Regulatory And Development Authority Act, 2013(23 of 2013);] [N.N. 25/2012-ST, Entry No. 26C] 57[Life insurance Services of life insurance business provided or agreed to policies - Military be provided by the Army, Naval and Air Force Group to military Insurance Funds to members of the Army, Navy and Air personnel Force, respectively, under the Group Insurance Schemes of the Central Government.]

[N.N. 25/2012-ST, Entry No. 26D]] Services Provided Services provided by an incubatee up to a total turnover of

by Incubatee fifty lakh rupees in a financial year subject to the following conditions, namely:(a) the total turnover had not exceeded fifty lakh rupees during the preceding financial year; and (b) a period of three years has not been elapsed from the date of entering into an agreement as an incubatee.

[N.N. 25/2012-ST, Entry No. 27]

52.

53.

54.

55.

56.

57.

The item (d) in entry 26A inserted by Notification No. 06/2015-ST (w.e.f. 01-04-2015).

The item (e) and (f) in entry 26A inserted by Notification No. 12/2015-ST (w.e.f. 30-04-2015).

The item (c) in entry 26A inserted by Notification No. 06/2014-ST (w.e.f. 11-07-2014).

The entry 26B inserted by Notification No.12/2015-ST (w.e.f. 30-04-2015).

Entry 26C inserted by NN. 09/2016-ST, dated 01-03-2016 (w.e.f. 01-04-2016).

Entry 26D inserted by NN. 07/2017-ST, dated 02-02-2017 (w.e.f. 02-02-2017)

__

__

__

__

A-36

Service Tax Law and Practice

Nature of Service/ Entity providing or receiving service

Exemption

Services by Unincorporated Body or Society – Trade Union

Service by an unincorporated body or a non- profit entity registered under any law for the time being in force, to its own members by way of reimbursement of charges or share of contribution as a trade union.

[N.N. 25/2012-ST, Entry No. 28(a)] Services by Service by an unincorporated body or a non- profit entity Unincorporated registered under any law for the time being in force, to its Body or Society – own members by way of reimbursement of charges or to Third Persons share of contribution for the provision of carrying out any activity which is exempt from the levy of service tax.

[N.N. 25/2012-ST, Entry No. 28(b)] Services by Service by an unincorporated body or a non- profit entity Unincorporated registered under any law for the time being in force, to its Body or Society – own members by way of reimbursement of charges or Monetary Limit for share of contribution up to an amount of five thousand Members rupees per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex.

[N.N. 25/2012-ST, Entry No. 28(c)] Intermediary Services by the following persons in respective capacities Services – Stock (a) sub-broker or an authorised person to a stock broker; Broking; (b) authorised person to a member of a commodity Commodity exchange; Exchange; Sale of 58[***] SIM Cards; banking/insurance (f) selling agent or a distributer of SIM cards or recharge coupon vouchers company in rural 59[ 60[(g) business facilitator or a business correspondent areas to a banking company with respect to accounts in its rural area branch.;] (ga) any person as an intermediary to a business facilitator or a business correspondent with respect to services 58.

Reference to E.G. * 7.11.8

7.11.8

7.11.8

__

The items (c), (d) and (e) in entry 29 omitted by Notification No. 06/2015-ST, dated 01-03-2015 (w.e.f.

01-04-2015). Earlier the items were read as under :(c) mutual fund agent to mutual fund or asset management company; (d) distributor to mutual fund or asset management company; (e) selling or marketing agent of lottery tickets to a distributer or a selling agent;

59.

60.

Entries (g), (ga) and (gb) substituted for Entry (g) vide Notification No. 20/2015-ST, dated 21-102015(w.e.f. 21-10-2015). The earlier entry (g) was read as under:“(g) business facilitator or a business correspondent to a banking company or an insurance company, in a rural area; or” The entry substituted vide Notification No. 01/2017-ST, dated 12-01-2017. The erstwhile entry

read as follows: “business facilitator or a business correspondent to a banking company with respect to a Basic Savings Bank Deposit Account covered by Pradhan Mantri Jan Dhan Yojana in the banking company’s rural area branch, by way of account opening, cash deposits, cash withdrawal, obtaining e-life certificate Aadhar seeding”.

Exemptions available in Service Tax Nature of Service/ Entity providing or receiving service

Exemption

mentioned in clause (g) (gb) business facilitator or a business correspondent to an insurance company in a rural area; or] (h) sub-contractor providing services by way of works contract to another contractor providing works contract services which are exempt.

[N.N. 25/2012-ST, Entry No. 29] 61[Process Services by way of carrying out any process amounting to amounting to manufacturer or production of goods excluding alcoholic Manufacture liquor for human consumption.

[N.N. 25/2012-ST, Entry No. 30(i)] Job-Work – Services by way of Carrying out an intermediate production Agricultural, process as job work not amounting to manufacture or Printing and Textile production in relation to agriculture, printing or textile processing.

[N.N. 25/2012-ST, Entry No. 30(ii)(a)] Job-Work – Services by way of Carrying out an intermediate production Diamonds/ process as job work not amounting to manufacture or production in relation to cut and polished diamonds and Gemstones/ Jewellery gemstones; or plain and studded jewellery of gold and other precious metals, falling under Chapter 71 of the Central Excise Tariff Act ,1985 (5 of 1986).

[N.N. 25/2012-ST, Entry No. 30(ii)(b)] Job-Work – Services by way of Carrying out an intermediate production Manufacturer process as job work not amounting to manufacture or production in relation to 62[any goods excluding alcoholic liquors for human consumption] on which appropriate duty is payable by the principal manufacturer.

[N.N. 25/2012-ST, Entry No. 30(ii)(c)] Job-Work – Services by way of Carrying out an intermediate production Manufacture of process as job work not amounting to manufacture or Cycles, Sewing production in relation to processes of electroplating, zinc Machines plating, anodizing, heat treatment, powder coating, painting including spray painting or auto black, during the course of manufacture of parts of cycles or sewing machines upto an aggregate value of taxable service of the specified processes of one hundred and fifty lakh rupees in a financial year subject to the condition that such aggregate value had not exceeded one hundred and fifty lakh rupees during the preceding financial year.

[N.N. 25/2012-ST, Entry No. 30(ii)(d)]

61.

62.

A-37 Reference to E.G. *

__

4.4.6

7.11.12

7.11.12

7.11.12

The entry 30(i) inserted by Notification No. 07/2017-ST, dated 02-02-2017 (w.e.f. 31-03-2017).

The words ‘any goods’ substituted vide Notification No. 06/2015-ST, dated 01-03-2015 read with Notification No. 16/2015-ST, dated 19-05-2015 (w.e.f. 01-06-2015).

A-38

Service Tax Law and Practice

Nature of Service/ Entity providing or receiving service

Exemption

Reference to E.G. *

Business Services by an organiser to any person in respect of a Exhibition Service business exhibition held outside India.

[N.N. 25/2012-ST, Entry No. 31] 63 [Telecommun-ication Services – Services by way of making telephone calls from Departmentally (a) departmentally run public telephones; Run Public (b) guaranteed public telephones operating only for local Telephones; calls; or Guaranteed Public (c) free telephone at airport and hospitals where no bills Telephones; Free are being issued.

Telephone at [N.N. 25/2012-ST, Entry No. 32] Airport, Hospital

7.11.16

Services by way of slaughtering of 64[***] animals.

[N.N. 25/2012-ST, Entry No. 33] Import of Services Services received from a provider of service located in a – Government/ non- taxable territory by Government, a local authority, a Local Authority/ governmental authority or an individual in relation to any purpose other than commerce, industry or any other Individual (other business or profession. than business 65[Provided that the exemption shall not apply to online entity) information and database access or retrieval services received by persons specified in clause (a);] [N.N. 25/2012-ST, Entry No. 34(a)] Import of Services Services received from a provider of service located in a – Entity non- taxable territory by an entity registered under section Registered Under 12AA of the Income Tax Act, 1961 (43 of 1961) for the Section 12AA purposes of providing charitable activities.

66[Provided that the exemption shall not apply to online information and database access or retrieval services received by persons specified in clause (b)] [N.N. 25/2012-ST, Entry No. 34(b)] Import of Services Services received from a provider of service located in a –a Person Located non- taxable territory by a person located in a non-taxable in a Non Taxable territory.

67[Provided that the exemption shall not apply to services Territory by way of transportation of goods by a vessel from a place

__

Slaughtering of Animals

7.11.13

__

__

__

63.

64.

65.

66.

The entry 32 omitted by Notification No. 06/2015-ST, dated 01-03-2015 (w.e.f. 01-04-2015).

The word ‘bovine’ omitted wide NN.44/2012-ST, dated 07-08-2012 w.e.f. (07-08-2012).

The proviso inserted vide Notification No. 47/2016-ST, dated 09-11-2016 (w.e.f. 01-12-2016).

The proviso made effective for clause (b) vide Notification No. 05/2017-ST, dated 30-01-

67.

The proviso inserted vide Notification No. 01/2017-ST, dated 12-01-2017 (w.e.f. 22-01-2017).

2017 (w.e.f. 30-01-2017).

Exemptions available in Service Tax Nature of Service/ Entity providing or receiving service

Services to be Provided for Libraries, Knowledge Enhancing Services – Employees State Insurance Corporation Services by way of Transfer of Going Concern Services by way of Public Conveniences Services by a Governmental AuthorityMunicipality 69[Loading, Unloading, packing etc. of rice and cotton

Exemption

outside India up to the customs station of clearance in India received by a person specified in clause (c);] [N.N. 25/2012-ST, Entry No. 34(c)] Services of public libraries by way of lending of books, publications or any other knowledge- enhancing content or material.

[N.N. 25/2012-ST, Entry No. 35] Services by Employees’ State Insurance Corporation to persons governed under the Employees’ Insurance Act, 1948.

[N.N. 25/2012-ST, Entry No. 36] Services by way of transfer of a going concern, as a whole or an independent part thereof.

[N.N. 25/2012-ST, Entry No. 37] Services by way of public conveniences such as provision of facilities of bathroom, washrooms, lavatories, urinal or toilets.

[N.N. 25/2012-ST, Entry No. 38] Services by 68[Government, a local authority or] a governmental authority by way of any activity in relation to any function entrusted to a municipality under article 243 W of the Constitution.

[N.N. 25/2012-ST, Entry No. 39] Services by way of loading, unloading, packing, storage or warehousing of rice, cotton, ginned or bailed.

[N.N. 25/2012-ST, Entry No. 40] Services received by the Reserve Bank of India, from outside India in relation to management of foreign exchange reserves; [N.N. 25/2012-ST, Entry No. 41] Service Provided Services provided by a tour operator to a foreign tourist in

by Tour Operator relation to a tour conducted wholly outside India.]

[N.N. 25/2012-ST, Entry No. 42] Services received

by RBI

68.

69.

A-39 Reference to E.G. *

__

__

7.11.14

__

7.3.2

__

__

__

The words “Government, a local authority or” inserted by Notification No. 22/2016-ST, dated 13-042016 (w.e.f. 13-04-2016).

Entry 40 substituted for new entry 40; and new entries 41 and 42 introduced by Notification No. 6/2014ST, dated 11-07-2014 (w.e.f. 11-07-2014). The earlier entry 40 was inserted by Notification No. 4/2014ST, dated 17-02-2014 (w.e.f. 17-02-2014). The erstwhile entry read as follows: “40. Services by way of loading, unloading, packing, storage or warehousing of rice”

A-40

Service Tax Law and Practice

Nature of Service/ Entity providing or receiving service 70[Common

Effluent Treatment Plant Specified Services in relation to Fruits and Vegetables

Services by way of admission at specified places Exhibition of Movie by an Exhibitor 71[Services

by right of admission to specified events

72[Governmental Services – to business entity having turnover upto 10 Lacs

Exemption

Reference to E.G. *

Services by operator of Common Effluent Treatment Plant by way of treatment of effluent.

[N.N. 25/2012-ST, Entry No. 43] Services by way of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labelling of fruits and vegetables which do not change or alter the essential characteristics of the said fruits or vegetables.

[N.N. 25/2012-ST, Entry No. 44] Services by way of admission to a museum, national park, wildlife sanctuary, tiger reserve or zoo.

[N.N. 25/2012-ST, Entry No. 45] Service provided by way of exhibition of movie by an exhibitor to the distributor or an association of persons consisting of the exhibitor as one of its members;] [N.N. 25/2012-ST, Entry No. 46] Services by way of right to admission to,(i) exhibition of cinematographic film, circus, dance, or theatrical performance including drama or ballet; (ii) recognised sporting event; (iii) award function, concert, pageant, musical performance or any sporting event other than a recognised sporting event, where the consideration for admission is not more than Rs 500 per person.]

[N.N. 25/2012-ST, Entry No. 47] Services provided by Government or a local authority to a business entity with a turnover up to rupees ten lakh in the preceding financial year except the services specified in sub-clauses (i), (ii) and (iii) of clause (a) of section 66D of the Finance Act, 1994 and renting of immovable property.

__

__

__

__

__

__

73[Explanation.- For the purposes of this entry, it is hereby clarified that the provisions of this entry shall not be applicable to the following services, namely:(a) services specified in sub-clauses (i), (ii) and (iii) of clause (a) of section 66D of the Finance Act, 1994; (b) services by way of renting of immovable property.]

[N.N. 25/2012-ST, Entry No. 48]

70.

71.

72.

73.

Entries 43, 44, 45 and 46 inserted by NN. 6/2015-ST, dated 01-03-2015 (w.e.f. 01-04-2015).

Entry 47 inserted by Notification No. 6/2015-ST, dated 01-03-2015 read with Notification No. 16/2015ST, dated 19-05-2015 (w.e.f. 01-06-2015).

Entry 48 inserted by Notification No. 07/2016-ST, dated 18-02-2016 (w.e.f. 01-04-2016).

Explanation inserted by Notification No. 26/2016, dated 20-05-2016 (w.e.f. 20-05-2016).

Exemptions available in Service Tax Nature of Service/ Entity providing or receiving service

Exemption

74[EPFO

to persons governed under EPF&MP Act

Services provided by Employees’ Provident Fund Organisation (EPFO) to persons governed under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952).

[N.N. 25/2012-ST, Entry No. 49] IRDA to insurers Services provided by Insurance Regulatory and under IRDA Act Development Authority of India (IRDA) to insurers under the Insurance Regulatory and Development Authority of India Act, 1999 (41 of 1999).

[N.N. 25/2012-ST, Entry No. 50] SEBI by way of Services provided by Securities and Exchange Board of protecting interests India (SEBI) set up under the Securities and Exchange of investors Board of India Act, 1992 (15 of 1992) by way of protecting the interests of investors in securities and to promote the development of, and to regulate, the securities market.

[N.N. 25/2012-ST, Entry No. 51] NCCCD under Services provided by National Centre for Cold Chain Ministry of Development under Ministry of Agriculture, Cooperation Agriculture and Farmer’s Welfare by way of cold chain knowledge dissemination.]

[N.N. 25/2012-ST, Entry No. 52] 75[Transportation Services by way of transportation of goods by an of goods by an aircraft from a place outside India upto the customs Aircraft station of clearance in India.]

[N.N. 25/2012-ST, Entry No. 53] 76[ Governmental

Services provided by Government or a local authority to another Government or local authority: Provided that nothing contained in this entry shall apply to services specified in sub-clauses (i),(ii) and (iii) of clause (a) of section 66D of the Finance Act, 1994.

[N.N. 25/2012-ST, Entry No. 54] Governmental Services provided by Government or a local authority by Services – issuance way of issuance of passport, visa, driving licence, birth certificate or death certificate of passport, visa, birth certificate etc.

[N.N. 25/2012-ST, Entry No. 55] Governmental Services provided by Government or a local authority Services – Value where the gross amount charged for such services does not upto Rs. 5,000/-. exceed Rs. 5000/-

A-41 Reference to E.G. * __

__

__

__

___

__

Services – from one to another Government or local authority

74.

75.

76.

Entries 49 to 52 inserted by NN. 09/2016-ST, dt. 01-03-2016 (w.e.f. 01-04-2016).

Entry 53 inserted by Notification No. 09/2016-ST, dated 01-03-2016 (w.e.f. 01-06-2016).

Entries 54 to 63 inserted by NN. 22/2016-ST, dated 13-04-2016 (w.e.f. 13-04-2016).

__

__

A-42 Nature of Service/ Entity providing or receiving service

Service Tax Law and Practice Exemption

Provided that nothing contained in this entry shall apply to services specified in sub-clauses (i), (ii) and (iii) of clause (a) of section 66D of the Finance Act, 1994: Provided further that in case where continuous supply of service, as defined in clause (c) of rule 2 of the Point of Taxation Rules, 2011, is provided by the Government or a local authority, the exemption shall apply only where the gross amount charged for such service does not exceed Rs. 5000/- in a financial year.

[N.N. 25/2012-ST, Entry No. 56] Governmental Services provided by Government or a local authority by Services – way of tolerating non-performance of a contract for which tolerating nonconsideration in the form of fines or liquidated damages is performance of payable to the Government or the local authority under contract. such contract.

[N.N. 25/2012-ST, Entry No. 57] Governmental Services provided by Government or a local authority by way ofServices – Registration; (a) registration required under any law for the time being in testing etc. required force; under any law (b) testing, calibration, safety check or certification relating to protection or safety of workers, consumers or public at large, required under any law for the time being in force.

[N.N. 25/2012-ST, Entry No. 58] Governmental Services provided by Government or a local authority by Services – Right to way of assignment of right to use natural resources to an use Natural resour- individual farmer for the purposes of agriculture. ces for agricultural [N.N. 25/2012-ST, Entry No. 59] purpose.

Governmental Services by Government, a local authority or a Services – Activity governmental authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G entrusted to a panchayat of the Constitution.

[N.N. 25/2012-ST, Entry No. 60] Governmental Services provided by Government or a local authority by Services – Right to way of assignment of right to use any natural resource where such right to use was assigned by the Government or use natural resources assigned the local authority before the 1st April, 2016: before 01-04-2016.

Provided that the exemption shall apply only to service tax payable on one time charge payable, in full upfront or in installments, for assignment of right to use such natural resource.

[N.N. 25/2012-ST, Entry No. 61]

Reference to E.G. *

__

__

__

__

__

Exemptions available in Service Tax Nature of Service/ Entity providing or receiving service

Exemption

A-43 Reference to E.G. *

Governmental Services - use radiofrequency spectrum during the financial year 2015-16.

Services provided by Government or a local authority by __ way of allowing a business entity to operate as a telecom service provider or use radiofrequency spectrum 77[during the period prior to 1st April, 2016] on payment of licence fee or spectrum user charges, as the case may be.

[N.N. 25/2012-ST, Entry No. 62] Governmental Services provided by Government by way of deputing ____ Services – payment officers after office hours or on holidays for inspection or of MOT charges container stuffing or such other duties in relation to import export cargo on payment of Merchant Overtime charges (MOT).]

[N.N. 25/2012-ST, Entry No. 63] 78[Banking Services by an acquiring bank, to any person in relation to _______ settlement of an amount upto two thousand rupees in a Services – ___ single transaction transacted through credit card, debit Payment upto Rs. card, charge card or other payment card service.

2000/Explanation. — For the purposes of this entry, “acquiring bank” means any banking company, financial institution including non-banking financial company or any other person, who makes the payment to any person who accepts such card.]

[N.N. 25/2012-ST, Entry No. 64] Research and Service involving import of technology, from so much of __ Development Cess the service tax leviable thereon under section 66B of the paid on the Import said Act, as is equivalent to the amount of cess payable on of Technology the said import of technology.

Major condition- Such cess paid within six months from the date of invoice [N.N. 14/2012-ST] Foreign Services provided by any person, for the official use of a __ Diplomatic foreign diplomatic mission or consular post in India, or for Mission or personal use or for the use of the family members of diplomatic agents or career consular officers posted Consular Post in India therein.

[N.N. 27/2012-ST] Property Tax paid Service of renting of an immovable property, from so much __ on Immovable of the service tax leviable thereon under section 66B of the Property said Finance Act, as is in excess of the service tax calculated on a value which is equivalent to the gross amount charged for renting of such immovable property less taxes on such property, namely property tax levied and 77.

The words ‘during the financial year 2015-16’ substituted vide NN. 39/2016-ST, dated 0209-2016 (w.ef. 02-09-2016).

78. The entry inserted vide NN. 52/2016-ST, dated 08-12-2016 (w.e.f. 08-12-2016).

A-44 Nature of Service/ Entity providing or receiving service

Service Tax Law and Practice Exemption

collected by local bodies.

Exporter of Goods- GTA

TBI/STEP

Small Service Providers

SEZ

Transport of Goods and Passengers by Indian Railways

Reference to E.G. * [N.N. 29/2012-ST]

Service provided to an exporter for transport of the said goods by GTA in a goods carriage from any container freight station or inland container depot to the 79[port, airport or land customs station], as the case may be, from where the goods are exported; or Service provided to an exporter in relation to transport of the said goods by GTA in a goods carriage directly from their place of removal, to an inland container depot, a container freight station, 80[port, airport or land customs station], as the case may be, from where the goods are exported.

[N.N. 31/2012-ST] Services, provided or to be provided, by a Technology Business Incubator (TBI) or a Science and Technology Entrepreneurship Park (STEP) recognized by the National Science and Technology Entrepreneurship Development Board (NSTEDB) of the Department of Science and Technology, Government of India, or 81[bio-incubators recognized by the Biotechnology Industry Research Assistance Council, under Department of Biotechnology, Government of India] from the whole of the service tax leviable thereon.

[N.N. 32/2012-ST] Services of aggregate value not exceeding ten lakh rupees in any financial year from the whole of the service tax leviable thereon.

[N.N. 33/2012-ST] Services on which service tax is leviable, received by a unit located in a SEZ or Developer of SEZ and used for the authorised operations, from the whole of the service tax, education cess and secondary and higher education cess leviable thereon.

[N.N. 12/2013-ST] Services provided by Indian Railways by way of ‘service of transportation of passengers in specified class’ and ‘services by way of transportation of goods’ till 30th September 2012.

[N.N. 43/2012-ST]

__

__

__

__

__

79. Subs. the words “port or airport” vide NN 04/2015-ST dt. 01-03-2015 (w.e.f. 01-04-2015).

80. Subs. the words “port or airport” vide NN 04/2015-ST dt. 01-03-2015 (w.e.f. 01-04-2015).

81. The words inserted by NN.12/2016-ST, dated 01-03-2016 (w.e.f. 01-04-2016).

Exemptions available in Service Tax Nature of Service/ Entity providing or receiving service

A-45

Exemption

Reference to E.G. *

Services provided under the Power System Development Fund Scheme

Exemption provided to services provided by way of Regasification of Liquid Natural Gas (LNG) and transportation of incremental Re-gasified Liquid Natural Gas (e-bid RLNG) under the Power System Development Fund Scheme to the specified conditions.

[N.N. 17/2015-ST, dated 19-05-2015]

__

Services provided

by Indian Bank or other entity to MTSO

Exemption provided to the service provided by an Indian Bank or other entity acting as an agent to the MTSO in relation to remittance of foreign currency from outside India to India, for the period from the 1st July, 2012 to 13th October, 2014.

[N.N. 19/2015-ST, dated 14-10-2015] Exemption provided to services in relation to Information Technology Software when such software recorded on a media having RSP and appropriate duties of Central Excise and customs has been paid subject to the specified conditions.

[N.N. 11/2016-ST, dated 01-03-2016] Exemption provided to the services provided by the specified organisations as defined in clause (zfa) of para 2 of Notification No.25/2012-ST, in respect of a religious pilgrimage facilitated by the Ministry of External Affairs of the Government of India, under bilateral arrangement, for the period from the 1st July, 2012 to 19th August, 2014.

[N.N. 25/2016-ST, dated 17-05-2016] Exemption provided to the taxable services with respect to which the invoice for the service has been issued on or before the 31st May, 2016, from the whole of Krishi Kalyan Cess leviable thereon, subject to condition that the provision of service has been completed on or before the 31st May, 2016 [N.N. 35/2016-ST, dated 23-06-2016] Exemption provided to the taxable services by way of transportation of goods by a vessel from outside India upto the customs station in India with respect to which the invoice for the service has been issued on or before the 31st May, 2016, from the whole of service tax leviable thereon, subject to the condition that the import manifest or import report required to be delivered under section 30 of the Customs Act, 1962 (52 of 1962) has been delivered on or before the 31st May, 2016 and the service provider or recipient produces Customs certified copy of such import manifest or import report.

[N.N. 36/2016-ST, dated 23-06-2016] Exemption provided to the taxable services provided by

__

Information Technology Software Services

Services provided by the Specified organisations in respect of a religious pilgrimage Exemption from Krishi Kalyan Cess (KKC)

Services by way of Transportation of goods by a vessel from outside India upto Customs Station in India

Services by way of

__

__

__

__

__

A-46 Nature of Service/ Entity providing or receiving service

Service Tax Law and Practice Exemption

Reference to E.G. *

way of granting long term (thirty years, or more) lease of industrial plots

State Government Industrial Development Corporations/ Undertakings to industrial units by way of granting long term (thirty years, or more) lease of industrial plots from service tax leviable on the one time upfront amount (called as premium, salami, cost, price, development charges or by any other name) payable for such lease.

[N.N. 41/2016-ST, dated 22-09-2016] Services by way of Exemption provided to the taxable services provided by Advancement of entities registered under section 12AA of Income-tax Act, Yoga 1961 in relation to Advancement of Yoga for the period from 01-07-2012 to 20-10-2015.

[N.N. 42/2016-ST, dated 26-09-2016] Transportation Exemption provided to the taxable services provided by Service by educational institutions as defined in clause (1) of section Educational 66 D of the Finance Act, 1994 in relation to transportation Institution services provided to students, faculty and staff of such institutions for the period from 01-04-2013 to 01-07-2014.

[N.N. 45/2016-ST, dated 30-09-2016] Services provided Exemption provided to the taxable services provided by by operator of the operators of Common Effluent Treatment Plant by way Common Effluent of treatment of effluent.

[N.N. 08/2017-ST, dated 20-02-2017] Services by way of Exemption provided to the taxable services by way of Admission to a admission to a museum for the period from 01-07-2012 to 31-03-2015. museum [N.N. 09/2017-ST, dated 28-02-2017]

———

__

__

__

__

Table 3 Negative List of Services Nature of Negative List Relevant Service/ Section of the Act Entity providing or receiving service Government Services by Government or a local authority excluding 66D(a) or a Local the following services to the extent they are not Authority covered elsewhere :(i) services by the Department of Posts by way of speed post, express parcel post, life insurance and agency services provided to a person other than Government (ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport (iii) transport of goods or passengers (iv) 1[any service], other than services covered under clauses (i) to (iii) above, provided to business entities Reserve Bank Services by the Reserve Bank of India 66D(b) of India Foreign Services by a foreign diplomatic mission located in 66D(c) India Diplomatic Mission Agriculture or Services relating to agriculture or agriculture produce 66D(d) by way of :Agriculture Produce (i) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or 2[***] testing (ii) supply of farm labour (iii) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or

Reference to E. G. *

4.1

4.2 4.3

4.4

* E.G. refers to “Taxation of Services: An Education Guide” released by the Government on 20-06-2012. The para of the EG referred herein provides views of the Government about the scope and coverage of these service entries. For detailed discussion on these entries. For text of EG please refer previous edition of this book. Please refer Part C, chapter 3 on “Negative List of Services” with the other chapters on specified service activities.

1. The words ‘support services’ substituted by the words ‘any service’ vide the Finance Act, 2015 made effective vide NN. 06/2016-ST, dated 18-02-2016 (w.e.f. 01-04-2016).

2. Word ‘seed’ omitted vide the Finance Act, 2013 w.e.f.10-05-2013.

[ A-47 ]

A-48 Nature of Service/ Entity providing or receiving service

Trading

Service Tax Law and Practice Negative List

bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market (iv) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use (v) loading, unloading, packing, storage or warehousing of agricultural produce; (vi) agricultural extension services; (vii) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce Trading of goods

Manufacturing 3[services by way of carrying out any process amounting to manufacture or production of goods excluding alcoholic liquor for human consumption] Selling of 4[Selling of space for advertisements in Print Media] Space for Advertisement in Print Media Toll Charges Service by way of access to a road or a bridge on payment of toll charges Gaming of Betting, gambling or lottery Chance 5[Explanation.– For the purposes of this clause, the expression “betting, gambling or lottery” shall not include the activity specified in Explanation 2 to clause (44) of section 65B;]

Relevant Section of the Act

Reference to E. G. *

66D(e)

4.5

66D(f)

4.6

66D(g)

4.7

66D(h)

4.8

66D(i)

4.9

3. The ‘Entry (f)’ omitted by the Finance Act, 2017 w.e.f 31-03-2017. Note that the same entry has

now been included in NN. 25/2012-ST as clause 30(i) of Paragraph 1 thereof, w.e.f 31-032017.

4. Clause (g) substituted vide Finance Act, 2014, made effective from the date of Notification No. 18/2014ST, dated 25-08-2104 (w.e.f. 01-10-2014). The erstwhile clause read as follows “selling of space or time slots for advertisements other than advertisements broadcast by radio or television.”

5. The Explanation inserted in clause (i) vide the Finance Act, 2015 read with Notification No. 14/2015-ST, dated 19-05-2015 (w.e.f. 01-06-2015).

Negative List of Services Nature of Service/ Entity providing or receiving service 6[Entertainme nt/Amusement Facilities Electricity Transmission or Distribution 7[Education

Renting Financial Services

A-49

Negative List

Relevant Section of the Act

Reference to E. G. *

Admission to entertainment events or access to amusement facilities

66D(j)

4.10]

Transmission or distribution of electricity by an electricity transmission or distribution utility

66D(k)

4.11

Services by way of :(i) pre-school education and education up to higher secondary school or equivalent (ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force (iii) education as a part of an approved vocational education course Services by way of renting of residential dwelling for use as residence Services by way of :(i) extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount (ii) inter se sale or purchase of foreign currency amongst banks or authorised dealers of foreign exchange or amongst banks and such dealers

66D(l)

4.12

66D(m)

4.13

66D(n)

4.14

66D(o)

4.15

Transportation Service of transportation of passengers, with or of Passengers without accompanied belongings, by :8[***] (ii) railways in a class other than (A) first Class (B) an air-conditioned coach (iii) metro, monorail or tramway (iv) inland waterways (v) public transport, other than predominantly for tourism purpose, in a vessel between places located in India

6. The clause (j) omitted vide the Finance Act, 2015 read with Notification No. 14/2015-ST, dated 19-052015 (w.e.f. 01-06-2015).

7. Clause (l) omitted vide the Finance Act, 2016 (w.e.f. 14-05-2016).

8. Sub-clause (i) of clause (o) omitted vide the Finance Act, 2016 (w.e.f. 01-06-2016). The erstwhile subclause read as follows:- “(i) stage carriage�.

A-50

Service Tax Law and Practice

Nature of Service/ Entity providing or receiving service

Negative List

Relevant Section of the Act

Reference to E. G. *

Transportation Services by way of transportation of goods :of Goods (i) By road except the services of – (A) a goods transportation agency (B) a courier agency 10[***] (iii) By inland waterways

66D(p)

4.16

Funeral Related Services

66D(q)

4.17

9[(vi)

metered cabs, or auto rickshaws]

Funeral, burial, crematorium or mortuary services including transportation of the deceased

———

9. Sub-clause (vi) substituted vide Finance Act, 2014, made effective from the date of Notification No. 18/2014-ST, dated 25-08-2014 (w.e.f. 01-10-2014). The erstwhile clause read as follows “metered cabs, radio taxis or auto rickshaws”.

10. Sub-clause (ii) of clause (p) omitted vide the Finance Act, 2016 (w.e.f. 01-06-2016). The erstwhile subclause read as follows:- “(ii) By an aircraft or a vessel from a place outside India up to the customs station of clearance in India”.

Table 4 List of Declared Services Nature of Service Renting of Immovable Property Construction ServicesCommercial , Industrial or Residential

Intellectual Property Right Information Technology Software Services

Declared Services

Renting of immovable property

Construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration is received after issuance of completion certificate by the competent authority.

Explanation-For the purposes of this clause ,(I) The expression “competent authority” means the Government or any authority authorised to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate from such authority, from any of the following, namely :a) architect registered with the Council of Architecture constituted under the Architects Act ,1972 (20 of 1972) ;or b) chartered engineer registered with the Institution of Engineers (India); or c) licensed surveyor of the respective local body of the city or town or village or development or planning authority; (II) The expression “construction” includes additions, alterations, replacements or remodelling of any existing civil structure Temporary transfer or permitting the use or enjoyment of any intellectual property right Development, design, programming, customisation, adaptation, upgradation, enhancement, implementation of information technology software

Relevant Section of the Act 66E(a)

Reference to E.G. 1

66E(b)

6.2

66E(c)

6.3

66E(d)

6.4

6.1

1 E.G. refers to “Taxation of Services: An Education Guide” released by the Government on 2006-2012. The para of the EG referred herein provides views of the Government about the scope and coverage of these service entries. For text of EG, please refer previous edition of this book.

For detailed discussion on these entries, please refer Part C, chapter 2 on “Declared Services” with the other chapters on specified service activities.

[ A-51]

A-52 Nature of Service Promise to do or no to do an Act Leasing Services Hire Purchase Execution of a Works Contract Supply of Food or Drink

2Right

to use of Radio-frequency Spectrum

Service Tax Law and Practice Declared Services

Relevant Section of the Act Agreeing to the obligation to refrain from an act, 66E(e) or to tolerate an act or a situation, or to do an act Transfer of goods by way of hiring, leasing, 66E(f) licensing or in any such manner without transfer of right to use such goods Activities in relation to delivery of goods on hire 66E(g) purchase or any system of payment by installments Service portion in the execution of a works 66E(h) contract Service portion in an activity wherein goods, being 66E(i) food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity Assignment by the Government of the right to use 66E(j) the radio-frequency spectrum and subsequent transfers thereof.

———

2. Inserted vide Finance Act, 2016 (w.e.f. 14-05-2016).

Reference to E.G. 1 6.5 6.6

6.7 6.8 6.9

-

Table 5 Rate of Service Tax Section 66B of Finance Act, 1994 provides the standard rate of service tax of 14%. Swachh Bharat Cess (SBC) of 0.5% is applicable on all taxable services w.e.f. 15-11-2015.Krishi Kalyan Cess (KKC) of 0.5% is applicable on all taxable services w.e.f. 01-06-2016. Thus the effective rate of Service Tax is 15%.

Apart from the above, Service Tax Rules, 1994 provide the alternate rate of service tax in case of services of specified descriptions, which is presented below in tabulated form.

Specified Services Air Travel Agent’s Services Life Insurance Services

Applicable Rate of Service Tax 1 From 01-06-2015, service tax may be charged at:(a) 0.7% of the basic fare in case of domestic booking; and (b) 1.4% of the basic fare in case of international bookings.

From 01-06-2015, service tax to be charged at (i)

14 % on the gross premium charged from a policy holder reduced by the amount allocated for investment, or savings on behalf of policy holder, if such amount is intimated to the policy holder at the time of providing of service;

2[(ia) in case

of single premium annuity policies other than (i) above, 1.4 per cent. of the single premium charged from the policy holder;]

(ii)

In all other cases, 3.5 per cent of the premium charged from the policy holder in the first year and 1.75 per cent of the premium charged from a policy holder in subsequent years.

The above will not applicable in case where the entire premium is paid for risk cover in life insurance.

Sale or Purchase of Foreign Currency

From 01-06-2015, service tax to be charged at (a) 0.14 per cent. of the gross amount of currency exchanged for an amount upto rupees 100,000, subject to the minimum amount of rupees 35; and (b) rupees 140 and 0.07 per cent. of the gross amount of currency exchanged for an amount of rupees exceeding rupees 100,000 and upto rupees 10,00,000; and (c) rupees 770 and 0.014 per cent. of the gross amount of currency exchanged for an amount of rupees exceeding 10,00,000, subject to maximum amount of rupees 7,000.

1. Also refer note at the end of the table.

2. Inserted by Notification No.19/2016-ST, dated 01-03-2016 (w.e.f. 01-04-2016).

[ A-53]

A-54 Promotion of Games of Chance Services

Service Tax Law and Practice From 01-06-2015, service tax to be charged at (in case of distribution of lottery or the games of chance) (a) If the lottery or lottery scheme is one where the guaranteed prize payout is more than 80%, service tax to be charged Rs 8,200/- on every Rs 10 Lakh (or part of Rs 10 Lakh) of aggregate face value of lottery tickets printed by the organising State for a draw; (b) If the lottery or lottery scheme is one where the guaranteed prize payout is less than 80%, service tax to be charged at Rs 12,800/on every Rs 10 Lakh (or part of Rs 10 Lakh) of aggregate face value of lottery tickets printed by the organising State for a draw.

Note: In relation to SB Cess applicable from 15-11-2015, the service provider is liable to pay an additional amount. This amount is to be computed by multiplying the amount of service tax liability calculated at above rates by effective rate of SB Cess and dividing the product by 14.

Likewise for KKC applicable from 01-06-2016, the service provider is liable to pay an additional amount. This amount is to be computed by multiplying the amount of service tax liability calculated at above rates by effective rate of KKC and dividing the product by 14.

———

Table 6 Abatements under Service Tax (Determination of Value of Services) Rules, 2006 and Notification No. 26/2012-ST, effective from 01-07-2012 S. No.

Description of taxable service

% value on which tax is payable

Conditions for Abatement

(1)

(2)

(3)

(4)

Services in relation to Works Contract :(i) in case of works contracts entered into for execution of original works (Refer Notes (a) &(b) at the end of table) 1[(ii) in case of works contracts not covered above including works contract entered into for:maintenance or repair or reconditioning or restoration or servicing of any goods; or maintenance or repair or completion and finishing services such as glazing or plastering or floor and wall tiling or installation or electrical fittings of immovable property (Refer Note (b) at the end of table) Services in relation to Financial Leasing including hire purchase (Refer Note (c) at the end of table)

40 (abatement available for 60% value)

CENVAT credit on input services and capital goods is available and CENVAT credit on inputs used in or in relation to the said works contract is not available

70 (abatement available for 30% value)

CENVAT credit on input services and capital goods is available and CENVAT credit on inputs used in or in relation to the said works contract is not available

1.

2.

3.

10 No conditions (abatement available for 90% value) 2[Services provided in relation to 70 No CENVAT credit available chit (abatement available for 30% value)

1. This entry has been substituted by NN. 11/2014-ST, dated 11-07-2014 (w.e.f. 01-10-2014).

2. Entry 8 inserted by NN. 08/2016-ST, dated 01-03-2016 (w.e.f. 01-04-2016).

[ A-55 ]

A-56 S. No. 4.

5.

6.

6[6A

.

Service Tax Law and Practice Description of taxable service

% value on which tax is payable

3[Construction of a complex, 30 1. building, civil structure or a part (abatement thereof, intended for a sale to a available for buyer, wholly or partly except 70% value) where entire consideration is received after issuance of completion certificate by the 2.

Competent authority

Conditions for Abatement

CENVAT credit on input services and capital goods is available and CENVAT credit on inputs used in or in relation to the said works contract is not available The value of land is included in the amount charged from the service receiver.

(Refer Note (d) at the end of table) of goods by 30 CENVAT credit on inputs and rail (other than service specified at (abatement capital goods not available.

Sl. No. 6 below) available for CENVAT Credit on input services 70% value) available] 5[Transport of goods in containers 40 CENVAT credit on inputs and by rail by any person other than (abatement capital goods not available.

Indian railways. available for CENVAT Credit on input services 60% value) available] 4[Transport

Transport of passengers, with or without accompanied belongings, by air, embarking from or terminating in a Regional Connectivity Scheme Airport.

7.

Transport of goods in a vessel

8.

8[Services

10

CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken by the service provider under the provisions of the CENVAT Credit Rules, 2004.”]

7[30] CENVAT credit on inputs and (abatement capital goods not available. available for CENVAT Credit on input services 70% value) available

9[30] No CENVAT credit available of goods transport agency in relation to transportation (abatement of goods other than used household available for goods.]

70% value)

3. This entry was amended by NN. 08/2016-ST, dated 01-03-2016 (w.e.f. 01-04-2016).

4. This entry amended by NN. 08/2016-ST, dated 01-03-2016 (w.e.f. 01-04-2016). For referring the erstwhile entry, please refer text of NN. 26/2012-ST at Page No.-D 639 in Volume 2 of this Book.

5. The entry 6 inserted by NN. 08/2016-ST, dated 01-03-2016 (w.e.f. 01-04-2016).

6. The entry 6A inserted by NN. 38/2016-ST, dated 30-08-2016 (w.e.f. 30-08-2016). Also refer Note (h) at the end of this table.

7. The number “40” substituted by the number “30” vide NN. 08/2015-ST, dated 01-03-2015 (w.e.f. 01-042015). Earlier the number ‘40’ was substituted by the number ‘50’ vide NN. 08/2014-ST, dated 11-072014 (w.e.f. 01-10-2014).

8. Substituted for the words “Services of goods transport agency in relation to transportation of goods” vide Notification No. 08/2016-ST, dated 01-03-2016 (w.e.f. 01-04-2016).

9. The number “25” substituted vide NN. 08/2015-ST, dated 01-03-2015 (w.e.f. 01-04-2015).

Abatements S. No. 9.

10.

12.

Description of taxable service

% value on which tax is payable

A-57 Conditions for Abatement

10[Services

of goods transport 40 No CENVAT credit available agency in relation to transportation (abatement of used household goods. available for 60% value) 11 [CENVAT credit on inputs and Transport of passengers, with or 30 capital goods not available. without accompanied belongings (abatement CENVAT Credit on input services by rail available for 70% value) available.]

13[(i) CENVAT credit on inputs 40 Renting of 12[motorcab] (Refer Note (e) at the end of table) (abatement and capital goods not available. available for CENVAT Credit on input 60% value) services other than renting of

motorcab not available.

CENVAT Credit on input services of renting of motorcab available in the following manner; (ii) CENVAT credit on input service of renting of motorcab has been taken under the provisions of the CENVAT Credit Rules, 2004, in the following manner: (a) Full CENVAT Credit of such input service received from a person who is paying service tax on forty percent of the value; or (b) Up to forty percent CENVAT credit of such input service received from a person who is paying service tax on full value; (iii) CENVAT credit on input services other than those specified in (ii) above, has not

10. Entry 9 inserted by NN. 08/2016-ST, dated 01-03-2016 (w.e.f. 01-04-2016).

11. The word ‘Nil’ substituted vide Notification No. 08/2015-ST, dated 01-03-2015 (w.e.f. 01-04-2015).

12. The words “any motor vehicle designed to carry passengers” substituted by the word “motorcab” vide NN. 08/2014-ST, dated 11-07-2014 (w.e.f. 01-10-2014).

13. The condition of abatement substituted by NN. 08/2014-ST, dated 11-07-2014 (w.e.f. 01-10-2014).

A-58 S. No.

Service Tax Law and Practice Description of taxable service

% value on which tax is payable

Conditions for Abatement

been taken under the provisions of the CENVAT Credit Rules, 2004.]

13.

14[Transport of passengers, with or without accompanied belongings, by –

40

No CENVAT Credit available.]

a. a contract carriage other than motorcab. b. a radio taxi.]

15[

c. a stage carriage]

14.

Renting of hotels, inns, guest 60 CENVAT credit on input services houses, clubs, campsites or other (abatement is available and CENVAT credit on commercial places meant for available for inputs and capital goods used for residential or lodging purposes.

40% value) providing the taxable service is not available

15.

Bundled service by way of supply 70 CENVAT credit available on input of food or any other article of (abatement services and goods (input as well as human consumption or any drink, available for capital goods) - except classifiable in a premises (including hotel, 30% value) under chapter 1 to 22 of the Central convention center, club, pandal, Excise Tariff Act, 1985 used for shamiana or any other place, providing the taxable service specially arranged for organizing a function) together with renting of such premises (Refer Note (f) at the end of table) CENVAT credit available on input 40 Service portion in an activity services and goods (input as well as wherein goods, being food or any (abatement capital goods) except classifiable available for other article of human consumption under chapter 1 to 22 of the Central or any drink (whether or not 60% value) Excise Tariff Act, 1985 used for intoxicating) is supplied in any providing the taxable service manner as a part of the activity, at a restaurant

16.

17.

CENVAT credit available on input 60 Service portion in outdoor catering services and goods (input as well as (abatement wherein goods, being food or any capital goods) except classifiable other article of human consumption available for under chapter 1 to 22 of the Central 40% value) or any drink(whether or not Excise Tariff Act, 1985 used for intoxicating) is supplied in any providing the taxable service manner as a part of such outdoor catering

14. Words “Transport of passengers, with or without accompanied belongings, by a contract carriage other than motorcab” substituted by NN. 18/2014-ST (w.e.f 01-10-2014).

15. The item (c) inserted vide NN. 08/2016-ST, dated 01-03-2016 (w.e.f. 01-06-2016).

Abatements S. No. 18.

Description of taxable service

16[

Services by a tour operator

(Refer Note (g) at the end of table)

A-59

% value on which tax is payable

Conditions for Abatement

60

(i) CENVAT credit on inputs and capital goods used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004. (ii) The bill issued for this purpose indicates that it is inclusive of charges of accommodation and transportation required for such a tour and the amount charged in the bill is the gross amount charged for such a tour including the charges of accommodation and transportation required for such a tour.]

(a) For the purposes of exemption at Serial number 1(a) – “original works” means(i) all new constructions; (ii) all types of additions and alterations to abandoned or damaged structures on land that are required to make them workable; (iii) erection, commissioning or installations of plant, machinery or equipment or structures, whether pre-fabricated or otherwise; (b) For the purposes of exemption at Serial number 1(a),(b) & (c) – “total amount” means the sum total of the gross amount charged for the works contract and the fair market value of all goods and services supplied in or in relation to the execution of works contract, whether or not supplied under the same contract or any other contract, after deducting(i) the amount charged for such goods and services, if any; and (ii) the value added tax or sales tax, if any levied thereon: Provided that the fair market value of goods and services so supplied may be determined in accordance with the generally accepted accounting principles. (c) For the purposes of exemption at Serial number 2 (i) The amount charged shall be an amount, forming or representing as interest, i.e. the difference between the instalments paid towards repayment of the lease amount and the principal amount contained in such instalments; (ii) The exemption shall not apply to an amount, other than an amount forming or representing as interest, charged by the service provider such as lease management fee, processing fee, documentation charges and administrative fee, which shall be added to the amount calculated in terms of (i) above. (d) For the purposes of exemption at Serial number 4 – The amount charged shall be the sum total of the amount charged for the service including the fair market value of all goods and services supplied by the recipient(s) 16. This entry latest amended by NN. 04/2017-ST, dated 12-01-2017 (w.e.f. 22-01-2017).

A-60

Service Tax Law and Practice

in or in relation to the service, whether or not supplied under the same contract or any other contract, after deducting(i) the amount charged for such goods or services supplied to the service provider, if any; and (ii) the value added tax or sales tax, if any, levied thereon: Provided that the fair market value of goods and services so supplied may be determined in accordance with the generally accepted accounting principles. (e) For the purposes of exemption at Serial number 10 The amount charged shall be the sum total of the amount charged for the service including the fair market value of all goods (including fuel) and services supplied by the recipient(s) in or in relation to the service, whether or not supplied under the same contract or any other contract.

Provided that the fair market value of goods and services so supplied may be determined in accordance with the generally accepted accounting principles. (f) For the purposes of exemption at Serial number 13 The amount charged shall be the sum total of the gross amount charged and the fair market value of all goods and services supplied in or in relation to the supply of food or any other article of human consumption or any drink (whether or not intoxicating) and whether or not supplied under the same contract or any other contract, after deducting(i) the amount charged for such goods or services supplied to the service provider, if any; and (ii) the value added tax or sales tax, if any, levied thereon: Provided that the fair market value of goods and services so supplied may be determined in accordance with the generally accepted accounting principles. (g) For the purposes of this notification, unless the context otherwise requires,"tour operator” means any person engaged in the business of planning, scheduling, organizing, arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours. (h) Nothing contained in Sl. No. 6A of the TABLE shall apply on or after the expiry of a period one year from the date of commencement of operations of the Regional Connectivity Scheme Airport as notified by the Ministry of Civil Aviation.

———

Table 7 Service Tax Payable under Reverse Charge Mechanism Notification No. 30/2012-ST, dated 20-06-2012 (effective from 01-07-2012) S. No.

Description of taxable service

% of service tax 1 payable by Service Provider

% of service tax payable by service recipient

(1)

(2)

(3)

(4)

1.

In respect of services provided or agreed to be provided by an insurance agent to any person carrying on insurance business

Nil

100

2[1A.

in respect of services provided or agreed to be provided by a recovery agent to a banking company or a financial institution or a non-banking financial company

Nil

100]

3[1B.

in respect of services provided or agreed to be provided by a mutual fund agent or distributor, to a mutual fund or asset management company

Nil

100]

respect of services provided or agreed to be provided by a selling or marketing agent of lottery tickets in relation to lottery in any manner to a lottery distributor or selling agent of the State Government under the provisions of the Lottery (Regulations) Act, 1998 (17 of 1988)]

Nil

100]

In respect of services provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road.

(Refer Note I & II at the end of table)

Nil

100

4[1C. 5[in

2.

1. Swach Bharat Cess & Krishi Kalyan Cess shall be leviable on the that percentage of taxable value which is specified in column (4) for the specified taxable services in column (2) of the Table.

2. Entry 1A inserted vide NN.10/2014-ST, dated 11-07-2014 (w.e.f. 11-07-2014).

3. Entry 1B omitted vide NN. 18/2016-ST ,dated 01-03-2016 (w.e.f. 01-04-2016). Earlier this entry was inserted vide NN.07/2015-ST, dated 01-03-2015 (w.e.f. 01-04-2015).

4. Entry 1C inserted vide NN.07/2015-ST, dated 01-03-2015 (w.e.f. 01-04-2015).

5. The entry substituted vide NN.18/2016-ST, dated 01-03-2016 (w.e.f. 01-04-2016). Earlier the entry read as follows: “in respect of service provided or agreed to be provided by a selling or marketing agent of lottery tickets to a lottery distributor or selling agent�.

[ A-61 ]

A-62

Service Tax Law and Practice

S. No.

Description of taxable service

% of service tax 1 payable by Service Provider

% of service tax payable by service recipient

3.

In respect of services provided or agreed to be provided by way of sponsorship to any body corporate or partnership firm located in the taxable territory.

In respect of services provided or agreed to be provided by an arbitral tribunal to any business entity located in the taxable territory

Nil

100

Nil

100

6[In respect of services provided or agreed to be provided by an individual advocate or firm of advocates by way of legal services, directly or indirectly] 7[5A. provided or agreed to be provided by a director of a company or a body corporate to the said company or the body corporate;

Nil

100

Nil

100

Nil

100

Nil

100

4.

5.

6.

7.

In respect of services provided or agreed to be provided by Government or local authority 8[***] excluding,(1) renting of immovable property, and (2) services specified in subclauses (i), (ii) and (iii) of clause (a) of section 66D of the Finance Act,1994 to any business entity located in the taxable territory (a) In respect of services provided or agreed to be provided by way of renting or hiring any motor vehicle designed to carry passenger on abated value to any person who is not engaged in the similar line of business by any individual, HUF or partnership firm, whether registered or not,

6. The entry substituted vide NN. 34/2016-ST, dated 06-06-2016 (w.e.f. 06-06-2016). Earlier the entry read as follows: “in respect of services provided or agreed to be provided by a firm of advocates or an individual advocate other than a senior advocate by way of legal services.”

The above entry earlier substituted vide NN.18/2016-ST, dated 01-03-2016 (w.e.f. 0104-2016) for the words “in respect of services provided or agreed to be provided by individual advocate or a firm of advocates by way of legal services”.

7. Inserted vide NN.45/2012-ST, dated 07-08-2012 (w.e.f. 07-08-2012) 8. The words ‘by way of support services’ omitted vide NN.18/2016-ST, dated 01-03-2016 (w.e.f. 01-042016).

Reverse Charge Mechanism S. No.

8.

9.

10.

9.

10.

11.

12.

Description of taxable service

including AOP, to a business entity registered as body corporate (both are located in taxable territory) (b) In respect of services provided or agreed to be provided by way of renting or hiring any motor vehicle designed to carry passenger on nonabated value to any person who is not engaged in the similar line of business by any individual, HUF or partnership firm, whether registered or not, including AOP, to a business entity registered as body corporate (both are located in taxable territory) In respect of services provided or agreed to be provided by way of supply of manpower for any purpose or [security services] 11 by any individual, HUF or partnership firm, whether registered or not, including AOP, to a business entity registered as body corporate (both are located in taxable territory) In respect of services provided or agreed to be provided in service portion in execution of works contract by any individual, HUF or partnership firm, whether registered or not, including AOP, to a business entity registered as body corporate (both are located in taxable territory) (Refer Note III at the end of the table) In respect of any taxable services provided or agreed to be provided by any person who is located in a nontaxable territory and received by any

A-63

% of service tax 1 payable by Service Provider

% of service tax payable by service recipient

9[50]

10[50]

12[NIL]

13[100]

50

50

Nil

100

The word “60%” substituted by the word “50%” vide NN.10/2014-ST (w.e.f. 01-10-2014).

The word “40%” substituted by the word “50%” vide NN.10/2014-ST (w.e.f. 01-10-2014).

Inserted vide NN.45/2012-ST, dated 07-08-2012 (w.e.f. 07-08-2012).

The word ‘25%’ substituted by the word ‘NIL’ vide NN.07/2015-ST, dated 01-03-2015 (w.e.f. 01-042015).

13. The word ‘75%’ substituted by the words ‘100%’ vide NN.07/2015-ST, dated 01-03-2015 (w.e.f. 01-042015).

A-64 S. No.

Service Tax Law and Practice % of service tax 1 payable by Service Provider

% of service tax payable by service recipient

In respect of any service provided or agreed to be provided by a person involving an aggregator in any manner

Nil

100]

In respect of services provided or agreed to be provided by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India

Nil

100]

Description of taxable service

person located in the taxable territory 14[other than non-assesse online recipient] 15[11.

16[12.

Notes: I. The person who pays or is liable to pay freight for the transportation of goods by road in goods carriage, located in the taxable territory shall be treated as the person who receives the service for the purpose of this notification.

II. The taxable services, provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road, where the person liable to pay freight is,— (a) any factory registered under or governed by the Factories Act, 1948 (63 of 1948); (b) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India; (c) any co-operative society established by or under any law; (d) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder; (e) any body corporate established, by or under any law; or (f) any partnership firm whether registered or not under any law including association of persons; any person who pays or is liable to pay freight either himself or through his agent for the transportation of such goods by road in a goods carriage: Provided that when such person is located in a non-taxable territory, the provider of such service shall be liable to pay service tax.

III. In works contract services, as both the service provider and service recipient are the persons liable to pay tax partially, the service recipient has an option of choosing the valuation method as per choice, independent of valuation method adopted by the provider of service.

——— 14. The words inserted vide Notification No. 49/2016-ST, dated 09-11-2016 15. Inserted vide Notification No. 07/2015-ST, dated 01-03-2015 (w.e.f. 01-03-2015).

16. Inserted vide Notification No. 03/2017-ST, dated 12-01-2017 (22-01-2017)

Table 8 ∗

Place of Provision of Services – A glance at the POP rules, 2012

Rule No.

Text of the Rule

Examples Mentioned in the Education Guide released by the Govt.

3

General Rule : The place of provision of a service shall ___ be the location of the recipient of service: Provided that in case 1[of services other than online information and database access or retrieval services, where] the location of the service receiver is not available in the ordinary course of business, the place of provision shall be the location of the provider of service.

4(a) Performance Based Services: (where location of goods Repair; recondition-ing; provided by receiver is important): The place of storage and warehousing; provision of following services shall be the location courier services; cargo where the services are actually performed: handling service; technical Services provided in respect of goods that are required to testing/inspection/certificatebe made physically available by the recipient of service to on/ analysis of goods, dry the provider of service, or to a person acting on behalf of cleaning etc. the provider of service, in order to provide the service.

Repair service of software by Provided that when such services are provided from a way of electronic means. remote location by way of electronic means the place of provision shall be the location where goods are situated at the time of provision of service.

2[Provided further that this clause shall not apply in the case of a service provided in respect of goods that are temporarily imported into India for repairs and are exported after the repairs without being put to any use in the taxable territory, other than that which is required for such repair;] 4(b) Performance Based Services: (where physical presence Plastic surgery; beauty of service receiver is important): The place of provision treatment services; personal of following services shall be the location where the security service; health and services are actually performed: fitness service; photography (to individual); services provided to an individual, represented either as service café service, the recipient of service or a person acting on behalf of the internet recipient, which require the physical presence of the classroom teaching etc. receiver or the person acting on behalf of the receiver, ∗ For detailed discussion on the POP Rules, refer Chapter No. 8, part B of the Book. Examples in table are quoted from the “Taxation of Services: An Education Guide” released by the Government on 20-06-2012 to highlight view taken by the Government about the scope of POP Rules.

1. The words inserted vide Notification No. 46/2016-ST, dated 09-11-2016 (w.e.f. 01-12-2016).

2. The proviso substituted by Notification No. 14/2014-ST, dated 11-07-2014 (w.e.f. 01-10-2014). The earlier proviso read as under:“Provided further that this sub-rule shall not apply in the case of a service provided in respect of goods that are temporarily imported into India for repairs, reconditioning or reengineering for re-export, subject to conditions as may be specified in this regard.”

[ A-65 ]

A-66 Rule No.

Service Tax Law and Practice Text of the Rule

Examples Mentioned in the Education Guide released by the Govt.

with the provider for the provision of the service.

5

Services relating to Immovable Property : The place of provision of services provided directly in relation to an immovable property, including services provided in this regard by experts and estate agents, provision of hotel accommodation by a hotel, inn, guest house, club or campsite, by whatever, name called, grant of rights to use immovable property, services for carrying out or coordination of construction work, including architects or interior decorators, shall be the place where the immovable property is located or intended to be located.

6

Services relating to Events: The place of provision of services provided by way of admission to, or organization of, a cultural, artistic, sporting, scientific, educational, or entertainment event, or a celebration, conference, fair, exhibition, or similar events, and of services ancillary to such admission, shall be the place where the event is actually held.

Services provided at more than one location: Where any service referred to in rules 4, 5, or 6 is provided at more than one location, including a location in the taxable territory, its place of provision shall be the location in the taxable territory where the greatest proportion of the service is provided.

Services provider and recipient are located in taxable territory: Place of provision of a service, where the location of the provider of service as well as that of the recipient of service is in the taxable territory, shall be the location of the recipient of service.

Specified Services : The place of provision of following services shall be the location of the service provider:(a) Services provided by a banking company, or a financial institution, or a non-banking financial company, to account holders; (b) 3[***];

7

8

9

Construction, reconstruction, alteration, repair or maintenance of any building or civil engineering work; renting of immovable property; real estate agents, auctioneers, architects, engineers relating to land, building or civil engineering; oil/gas/ mineral exploration or exploitation, hotel accommodation, warehouse space; legal services for application of planning permission; packages of property management services Events such as :conventions; conferences; exhibitions; fairs; seminars; workshops; weddings; sports and cultural events

___

___

Intermediary servicesTravel Agent; Tour operator; Stock Broker; Commission Agent; Recovery Agent

3. Clause (b) omitted vide Notification No. 46/2016-ST, dated 09-11-2016 (w.e.f. 01-12-2016). The erstwhile clause read as follows: “Online information and database access or retrieval services�.

Place of Provision of Services Rule No.

Text of the Rule

A-67 Examples Mentioned in the Education Guide released by the Govt.

(c) Intermediary services; 4[(d)

Service consisting of hiring of all means of transport other than,(i) aircrafts, and (ii) vessels except yachts,

10

11

12

upto a period of one month.]

Goods transportation services: The place of provision of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of the goods.

Provided that the place of provision of services of goods transportation agency shall be the location of the person liable to pay tax.

Passenger transportation services: The place of provision in respect of a passenger transportation service shall be the place where the passenger embarks on the conveyance for a continuous journey.

Services provided on Board a conveyance: Place of provision of services provided on board a conveyance during the course of a passenger transport operation, including services intended to be wholly or substantially consumed while on board, shall be the first scheduled point of departure of that conveyance for the journey.

___

___

___

13

Power of the Government to notify place of provision for specific service: In order to prevent double taxation or non-taxation of the provision of a service, or for the uniform application of rules, the Central Government shall have the power to notify any description of service or circumstances in which the place of provision shall be the place of effective use and enjoyment of a service.

___

14

Order of application of rules: Notwithstanding anything stated in any rule, where the provision of a service is, prima facie, determinable in terms of more than one rule, it shall be determined in accordance with the rule that occurs later among the rules that merit equal consideration.

___

———

4. The clause (d) substituted vide Notification No. 14/2014-ST, dated 11-07-2014 (w.e.f. 01-10-2014). The earlier clause read as follows :- “(d) Service consisting of hiring of means of transport, upto a period of one month.”

Table 9 Interest, Penalties and Prosecution under Service Tax Law Relevant Provisions

Offence/Default

Interest/Penalty prescribed

Section 70 and Delay in furnishing of Notification No. service tax returns 20/2007-ST, dated 12-052007 Section 73B Delay in payment of service tax in accordance with the provisions of Section 73A

Upto 15 days – Rs. 500 Beyond 15 days but upto 30 days – Rs. 1,000 Beyond 30 days — Rs.100 per day from Thirty first day but not exceeding Rs. 20,000.

From 14-05-2016 Simple interest @ 15% p.a. for the delayed period.

From v-04-2011 upto 13-05-2016 Simple interest @ 18% p.a. for the delayed period.

In both the periods, prior to and post 14-052016, in case of a service provider having value of taxable service less than sixty lacs rupees in a financial year, interest shall be reduced by 3%.

Section 75

Delay in payment of From 14-05-2016 service tax in accordance - In case the tax is collected but not paid – with the provisions of 24% per annum Section 68 - In other cases – 15 % per annum From 01-10-2014 till 13-05-2016 - Delay upto 6 month - Simple interest @ 18% - More than Six months and upto one year 18% for first six months and 24 % for the delay beyond six months.

- More than One Year - 18% for first six months; 24 % for next six months and 30% for any delay beyond one year.

In both the periods, prior to and post 14-052016, in case of a service provider having value of taxable service less than sixty lacs rupees in a financial year, interest shall be reduced by 3%.

[ A-69 ]

A-70 Relevant Provisions Section 76

Service Tax Law and Practice Offence/Default

Interest/Penalty prescribed

Failure to pay service tax From 14-05-2015 Penalty is equivalent to an amount not exceeding 10% of the service tax demand.

No penalty leviable in case service tax along with interest paid within a period of thirty days from the date of service of notice issued under Section 73(1).

Reduced penalty (25% of the penalty imposed) payable, if service tax, interest and reduced penalty paid within 20 days of receipt of order.

Section 77

Section 78

Failure to get registered OR Failure to furnish information, produce documents or appear before the Central Excise Officer Failure to keep, maintain or retain books of accounts as prescribed OR Failure to pay tax electronically OR Issuance of invoice with incorrect or insufficient details or non accounting thereof OR Contravention of any Service Tax Provision or any rule made thereunder for which no penalty is prescribed else-where in the Act Service tax not levied or paid or short levied or short paid or erroneously refunded by reason of fraud, collusion, wilful misstatement, suppression of facts, contravention of any provisions or rules with intent to evade service tax

Maximum Rs. 10,000

Maximum Rs. 10,000

Maximum Rs. 10,000

Maximum Rs. 10,000

Maximum Rs. 10,000

From 14-05-2015 Penalty is equivalent to an amount which shall be equal to the service tax demand.

Penalty shall be reduced to 15% of the service tax determined where service tax is paid along with interest and reduced penalty, within 30 days from the date of the service of Notice under Section 73(1).

Penalty shall be reduced to 25% of the service

Interest, Penalties and Punishments under Service Tax Law Relevant Provisions

Offence/Default

A-71

Interest/Penalty prescribed

tax determined if tax is paid along with interest and reduced penalty within 30 days from the date of receipt of the order under Section 73(2).

Section 78A

Section 87

Offences by Directors etc. Where the Director/Manager/Secretary or other of Company officer of the Company is knowingly concerned with specified contravention, he shall be liable to a penalty which may extend to Rs. 1,00,000/Non-payment of dues to Recovery of amount from third parties, Central Government provisional attachment and sale of property as land revenue

Section 88

Non-payment of any amount of duty, penalty, interest or any other sum payable under Service Tax Law.

Section 89

Provision of service without issue of invoice; Availment and utilization of CENVAT credit without actual receipt of inputs or input services; Maintenance of false books of accounts or failure to supply any information or submitting false information;

Non-payment of amount collected as service tax for a period of more than six months.

Any amount of duty, penalty, interest, or any other sum payable under this Chapter be the first charge on the property of the assessee or the person as the case may be, subject to charge under section 529 A of the Companies Act, 1956 and the Recovery of Debts Due to Banks and the Financial Institutions Act, 1993 and the Securitization and Reconstruction of Financial Assets and the Enforcement of Security Interest Act, 2002.

Where the amount of offence exceeds Rs. 2 Crore, imprisonment for a term which may extend to three years. Also, in the absence of recording of adequate reasons in the judgment for commission of the offence, minimum time period for imprisonment would be 6 months.

Where the amount of offence does not exceed Rs. 50 lakhs, imprisonment for a term which may be extend to one year.

Where the person again convicted of an offence, imprisonment for a term which may extend to three years.

Where the amount of offence exceeds Rs. 2 Crore, imprisonment for a term which may extend to seven years. This offence shall be cognizable. Also, in the absence of recording of adequate reasons in the judgment for commission of the offence, minimum time period for imprisonment would be 6 months.

Where the amount of offence does not exceed Rs. 2 Crore, imprisonment for a term which may be extend to three year.

Where the person again convicted of an offence, imprisonment for a term which may extend to seven years.

A-72 Relevant Provisions

Service Tax Law and Practice Offence/Default

Interest/Penalty prescribed

Note: The Finance Act, 2016 withdraws the power of arrest in all offences other than the offence of collection of tax and non-payment thereof.

Rule 14(1)(i) of the CENVAT Credit Rules, 2004 Rule 14(1)(ii) of the CENVAT Credit Rules, 2004 Rule 15(1) of the CENVAT Credit Rules, 2004

CENVAT credit wrongly As per Sections 11A of the Central Excise Act, taken but not utilised 1944 or Sections 73 of the Finance Act, 1994.

Rule 15(2) of the CENVAT Credit Rules, 2004

Penalty under clause (c), clause (d) or clause (e) of sub-section (1)of section 11AC of the Central Excise Act, 1944.

Rule 15(3) of the CENVAT Credit Rules, 2004

Rule 15A of the CENVAT Credit Rules, 2004

CENVAT credit wrongly As per Sections 11A and 11AA of the Central utilised or erroneously Excise Act, 1944 or Sections 73 and 75 of the refunded Finance Act, 1994.

CENVAT credit wrongly taken in respect of input, capital goods or input services in contravention of any of the provisions of rules CENVAT credit wrongly taken in respect of input, capital goods or input services by reason of fraud etc. by the manufacturer CENVAT credit wrongly taken in respect of input, capital goods or input services by reason of fraud etc. by the Service Provider Contravention of the provisions of these rules for which no penalty has been prescribed

Confiscation of goods, and penalty in terms of Section 11AC(1)(a) or Section 11AC(1)(b) of the Central Excise Act, 1944 or Section 76(1) of the Finance Act, 1994.

Penalty under section 78(1) of the Finance Act, 1994.

Maximum Rs. 5,000

Notes: (a) No penalty shall be levied until and unless a show-cause notice is issued except for the letter issued under Section 73(1A).

———

Table 10 Time Obligations under Service Tax Law S. No.

Particulars

1Relevant Provisions 1

Frequency/ Periodicity

Time Limit

Form to be Used

2Within 30 days from the date on which a service becomes taxable, or from the date of commencement of business for providing taxable service (i) Within 30 days from the date of commencement of business or 30 days from 16-06-2005, whichever is later (ii) Within 30 days of exceeding the aggregate value of taxable service of Rs 9 lakh For Single Premises Certificate shall be granted within 2 days of making the application for

Form ST-1 (online)

Registration 1.

Application for Registration under Service Tax Provisions

Section 69(1) (Rule 4 of the Service Tax Rules, 1994)

One time

2.

Application for Registration by— (i) Input service distributor;

Section 69(2)

One time

[Rule 3 of the Service Tax (Registration of Special Category of Persons) Rules, 2005]

(ii) Service provider whose aggregate taxable value of service exceeds 3Rs 9,00,000

3.

Grant of Certificate of Registration

Section 69

One time

(Rule 4 of the Service Tax Rules, 1994)

Form ST-1 (online)

Form ST-2 (online)

1. Wherever only section number is indicated, it pertains to the Finance Act, 1994.

2. This time-limit is subject to the time-limit prescribed for registration under Section 69(2).

3. Prior to 01-04-2008, this limit was Rs 7,00,000.

[ A-73 ]

A-74 S. No.

4.

5.

Service Tax Law and Practice Particulars

Change in Certificate of Registration Surrender of Certificate of Registration

1Relevant Provisions 1

Rule 4(5A) of the Service Tax Rules, 1994 Rule 4(7) of the Service Tax Rules, 1994

Frequency/ Periodicity

Whenever change is affected On cessation of provision of taxable services

Time Limit registration; For Centralized Premises Certificate shall be granted within 7 days of making the application for registration; otherwise it will be deemed to have been granted Within 30 days of such change Immediately

Form to be Used

Form ST-1 (online) N.A.

Payment of Service Tax 6.

Payment of Service Tax by the assessees such as corporates (other than individuals, proprietary and partnership firms)

Section 68(2) (Rule 6 of the Service Tax Rules, 1994)

Monthly

7.

Payment of Service Tax by the assessees being individuals, proprietary and partnership firms

Section 68(2) (Rule 6 of the Service Tax Rules, 1994)

Quarterly

Payment to be made by 5th (6th in case of electronic payment) of the following month (for the month of March, by the 31st day of March of the calendar year) Payment to be made by 5th of the following quarter (6th in case of electronic payment) (for quarter ending March, by the 31st day of

GAR-7 Challan

GAR-7 Challan

Time Obligations under Service Tax Law S. No.

Particulars

1Relevant Provisions 1

Frequency/ Periodicity

Time Limit March of the calendar year) Forthwith

A-75 Form to be Used

GAR-7 Challan

8.

Depositing of service tax collected from any person in excess or where not required to be collected

Section 73A(1)&(2)

As and when so collected

9.

Memorandum of provisional payment of service tax based on provisional assessment along with Form ST-3

Rule 6(4) and 6(5) of the Service Tax Rules, 1994

Half-yearly

To be prepared on Monthly/ Quarterly basis indicating the difference in tax collected and tax paid and submitted along with Form ST-3

Form ST-3A

To be submitted within 25 days of the end of each half year i.e. by 25th April (in case half year ending on 31st March) and by 25th October (in case half year ending on 30th September) By the end of the month following the particular quarter ÂŁ or half year.

Form ST-3 (online)

Filing of Return 10.

Return of Service Tax (to be submitted along with the copies of monthly/ quarterly tax paid challans in GAR-7)

Section 70 (Rule 7 of the Service Tax Rules, 1994) (Also refer S. No. 9 below)

Half-yearly

11.

Return to be submitted by output service provider who avails CENVAT credit

Rule 9(9) of the CENVAT Credit Rules, 2004

Half-yearly

ÂŁ. There seems to be some inadvertent mistake.

Form ST-3 (online)

A-76 S. No. 12.

13.

14.

15.

16.

Service Tax Law and Practice Particulars Return to be submitted by input service distributor giving details of credit received and distributed during the said half year Revised return of service tax Or/And Revised return of CENVAT credit

Annual Return for financial year to be submitted by every assessee Annual Return to be submitted by manufacturer of final produces or provider of output service for each financial year Annual Information Return to be submitted by RBI & Electricity Companies for specified transaction

1Relevant Provisions 1 Rule 9(10) of the CENVAT Credit Rules, 2004

Frequency/ Periodicity Half-yearly

Rule 7B of the Service Tax Rules, 1994 and Rule 9(11) of the CENVAT Credit Rules, 2004

Whenever required

Rule 7(3A) of Service Tax Rules, 1994

Annual

Rule 9A of CENVAT Credit Rules, 2004

Notification No. 04/20016-ST, dated 15/02/2016

Time Limit By the end of the month following the particular half year.

Form to be Used Form ST-3 (online)

Service tax return — within 90 days from the date of filing of the original return, CENVAT credit return — within 60 days from the date of filing of the original return By 30th November of succeeding financial year

Form ST-3 (online)

Annual

By 30th November of succeeding financial year

Not Yet Notified

Annual

By 31st December of succeeding Financial Year

AIRF along with Relevant annexures

Not Yet Notified

Time Obligations under Service Tax Law S. No.

1Relevant Provisions 1 Refund of Service Tax

17.

Application for refund of service tax by the person who has borne incidence of tax Application for refund of service tax

18.

19.

20.

Particulars

Application for filing a claim of rebate of duty paid on inputs, service tax and cess paid on input services Application for rebate of service tax paid on specified input services

A-77

Frequency/ Periodicity

Time Limit

Form to be Used

Section 73A(6)

Whenever a person desires to claim refund

Within 6 months after public notice by the Government

Form R

Section 11B of the Central Excise Act, 1944 Rule 6A of the Services Tax Rules, 1994 and Notification No. 39/2012-ST, dated 20-062012

Whenever the assessee desires to claim refund Whenever the assessee desires to claim rebate

Within one year from the relevant date

Form R

Within one year from the relevant date

ASTR-2

Notification 41/2012-ST, dated 29-062012

Monthly/ quarterly/ half yearly/ yearly

Within one year of the date of export

Form A-1

21.

Declaration to be given for allotment of service tax code

Notification 41/2012-ST, dated 29-062012

Before filing a claim for refund of service tax

Before filing Form A-1 STC to be allotted within seven days from the date of receipt of Form A-2

Form A-2

22.

Application for refund of CENVAT Credit with respect to the services exported without payment of service tax

Rule 5 of the CENVAT Credit Rules, 2004 and Notification No. 27/2012CE(NT), dated 18-06-2012

Not more than once in any quarter/ month, depending upon the category of person applying for refund

Within one year from the relevant date (as per Section 11B of the Central Excise Act, 1944)

Form-A

A-78 S. No. 23.

Service Tax Law and Practice Particulars Application for Refund of CENVAT Credit by Provider of service which are notified under subsection (2) of section 68

1Relevant Provisions 1 Rule 5B of CENVAT Credit Rules, 2004 and Notification No. 12/2014CE(NT), dated 03-03-2014

Frequency/ Periodicity Half yearly

Notification No. 12/2013-ST, dated 01-072013

As and when required

Not Specified

Form A-1

Notification No. 12/2013-ST, dated 01-072013

As and when required

Within fifteen working days from the date of submission of FormA-1

Form A-2

Notification No. 12/2013-ST, dated 01-072013

Quarterly

Within 30 days from the end of the particular quarter

Form A-3

Notification No. 12/2013-ST, dated 01-072013

Quarterly

Within one year form the end of the month in which actual amount of service tax was paid by such developer or unit, to the registered service provider

Form A-4

Time Limit Before the expiry period of one year from the due date of filing of return for the half year

Form to be Used Form-A

SEZ 24.

25.

26.

27.

Declaration by the unit of a SEZ or developer for availing ab initio exemption Authorisation by Deputy/ Assistant commissioner to the SEZ Unit/ Developer Quarterly return to be furnished by the SEZ Unit/ Developer furnishing the details of services procured without payment of service tax Application for claiming refund of service tax paid on specified services used for authorised operations

Time Obligations under Service Tax Law S. No. 28.

29.

30.

31.

1Relevant Provisions 1 Appeal & Adjudication Rectification of Section 74 mistake in the assessment order which is apparent from the record, by the Central Excise Officer, either suo motu or when brought to his notice by the assessee or CCE or CCE (Appeals)

Particulars

Passing of Adjudicating Order for the SCN issued under Section 73(1) Passing of Adjudicating Order for the SCN issued under Proviso to Section 73(1) and Proviso to Section 73(4A) Direction to adjudicating authority for transfer of order-inoriginal by the Commissioner of Central Excise to be appealed before Commissioner (Appeals)

A-79

Frequency/ Periodicity

Time Limit

Form to be Used

Whenever the mistake becomes apparent (but not after the expiry of two years from the date of the order)

To be rectified /amended within 2 years from the date of the order sought to be rectified was passed by the Central Excise Officer

N.A.

Section 73(4B)

When the order is ready to be passed

N.A.

Section 73(4B)

When the order is ready to be passed

Within Six months from the date of Notice where it is possible to do so Within one year from the date of Notice where it is possible to do so

Section 84

Whenever the CCE desires to revise

To be directed within 3 months from the date of the order

N.A.

N.A.

A-80 S. No. 32.

33.

34.

35.

36.

Service Tax Law and Practice Particulars Appeal to the CCE (Appeals) by any person against any decision or order of adjudicating authority subordinate to CCE Appeal to the CCE (Appeals) by the Central Excise Officer against any decision or order of adjudicating authority subordinate to CCE Passing of Appellate Order by the CCE (Appeals) in respect to an appeal filed by the assessee under S. 85(1) Appeal by the CCE against the order passed by the CCE (Appeals) under Section 85

Appeal by the assessee to the Appellate Tribunal (CESTAT) against the order of CCE u/S. 73 or 83-A or 84 and against the order of CCE (Appeals) u/S. 85

1Relevant Provisions 1 Section 85(1) & 85(3A) (Rule 8 of the Service Tax Rules, 1994)

Frequency/ Periodicity If the assessee prefers to file an appeal

Section 84

If the Department prefers to file an appeal

To be filed within 3 months of the receipt of the order sought to be appealed against

Form ST-4 (in duplicate)

Section 85(4)

When the order is ready to be passed

No time-limit prescribed

N.A.

Section 86(2A) (Rule 9 of the Service Tax Rules, 1994)

If the Committee of Commissioners appointed by Board prefers to file an appeal If the assessee prefers to file an appeal

Within 4 months of the receipt of the order sought to be appealed against

Form ST-7 (in quadruplicate)

To be filed within 3 months of the receipt of the order sought to be appealed against

Form ST-5 (in quadruplicate)

Section 86(1) (Rule 9 of the Service Tax Rules, 1994)

Time Limit To be filed within 2 months of the receipt of the order sought to be appealed against

Form to be Used Form ST-4 (in duplicate)

Time Obligations under Service Tax Law S. No. 37.

38.

39.

40.

41.

Particulars Appeal by the CCE on the direction of Board to the Appellate Tribunal (CESTAT) against the order of CCE u/S. 73 or 83A or 84 Memorandum of Crossobjections by the other party who has not filed the appeal Passing of Appellate Order by the CESTAT in respect to an appeal filed by the assessee/ department u/S. 86

Advance Ruling Application for Advance Ruling (Service Tax)

Withdrawal of the Application for Advance Ruling by the applicant

A-81

1Relevant Provisions 1 Section 86(2) (Rule 9 of the Service Tax Rules, 1994)

Frequency/ Periodicity If Board/the committee appointed thereby prefers to direct CCE for filing the appeal

Within 4 months of the receipt of the order sought to be appealed against

Section 86(4) (Rule 9 of the Service Tax Rules, 1994)

On receipt of notice from the Appellate Tribunal

To be filed within 45 days from the date of receipt of the notice

Form ST-6 (in quadruplicate)

Section 86

When the order is ready to be passed

No time-limit prescribed

N.A.

Rule 3 of the ST (Advance Rulings) Rules, 2003

Whenever required

Before providing the proposed service for which advance ruling is to be sought

AAR (ST-I)

Section 96C

When the applicant desires to withdraw his application

To be withdrawn within 30 days of the date of the application and thereafter, only with the leave of the Authority

N.A.

Time Limit

Form to be Used Form ST-7 (in quadruplicate)

A-82 S. No. 42.

Service Tax Law and Practice Particulars Pronouncement of the Advance Ruling by the Authority

1Relevant Provisions 1 Section 96D

Frequency/ Periodicity When need to pronounce the ruling arises

Time Limit To be pronounced in writing within 90 days of the receipt of the application for advance ruling

Form to be Used N.A.

Settlement of Cases 43.

Application for settlement of cases

Section 32E

Whenever required

Before adjudication of the matter/case

SC(ST)-1

Compounding of Offences 44.

45.

46.

Either before Form or after the institution of prosecution Exporter of Goods Claiming the Exemption for GTA and Foreign Commission Agent Services Before Information by Notification No. Whenever Form EXP1 availing the exporter to the 31/2012-ST, required said department dated 20-06exemption before seeking 2012 exemption for service tax on input services of GTA used for exports To be Return to be Notification No. Half Yearly Form EXP2 submitted filed by the 31/2012-ST, within 15 days exporter dated 20-06of the end of claiming the 2012 each half year exemption for i.e. by 15th service tax on April (in case input services of half year GTA used for ending on 31st exports March) and by 15th October (in case half year ending on 30th September) Application for compounding of offence

Section 9A(2)

Whenever required

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Table 11 Territorial Jurisdiction of “India” for the purposes of Service Tax As per Section 64 of Chapter V of the Finance Act, 1994, the jurisdiction of the provisions of service tax extends to the whole of India except the State of J&K. For the above purposes the expression ‘India’ had been defined in the Service Tax Law. The notable point is that over the period of time, there is a difference in the scope of territories covered by this expression. Following are the various meanings assigned to this expression under the Service Tax Law. Effective from 01-07-2012 The Finance Act, 1994 vide clause no. (27) of Section 65B, defines “India” as under “(27)“India” means,–– (a) the territory of the Union as referred to in clauses (2) and (3) of article 1 of the Constitution; (b) its territorial waters, continental shelf, exclusive economic zone or any other maritime zone as defined in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976(80 of 1976); (c) the seabed and the subsoil underlying the territorial waters; (d) the air space above its territory and territorial waters; and (e) the installations, structures and vessels located in the continental shelf of India and the exclusive economic zone of India, for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof; It may be noted that Notification No. 14/2010-ST, dated 27-02-2010 which defined coverage of India earlier has not been rescinded as yet and still alive. However, the definition in the legislation will override the one given in the Notification.

Effective from 27-02-2010 In the year 2010, the Government superseded Notification No.1/2002-ST, dated 01-03-2002 vide Notification No. 14/2010-ST, dated 27-02-2010 effective from 27-02-2010. This notification reads as under Notification No. 14/2010 – ST, dated 27-02-2010 G.S.R. (E).- In exercise of the powers conferred by clause (a) of the sub-section (6) of Section 6 and clause (a) of sub-section (7) of Section 7 of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976 (80 of 1976), and in supersession of the Government of India in the Ministry of Finance (Department of Revenue) notification No. 1/2002-Service Tax, dated the 1st March, 2002, published in the Gazette of India, Extraordinary, vide number G.S.R. 153 (E), dated the 1st March, 2002, except as respects things done or omitted to Chapter V of the Finance Act, 1994 (32 of 1994), to the areas specified in column (2) of the Table below, in the continental shelf and exclusive economic zone of India for the purposes as mentioned in column (3) of the said Table:-

[ A-83 ]

A-84 S. No.

Service Tax Law and Practice The areas in the Continental Shelf and the Exclusive Economic Zone of India (2)

Purpose

1.

Whole of continental shelf and exclusive economic zone of India

Any service provided for all activities pertaining to construction of installations, structures and vessels for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof.

2.

The installations, structures and vessels within the continental shelf and the exclusive economic zone of India, constructed for the purposes of prospecting or extraction or production of mineral oil and natural gas

Any service provided or to be provided by or to such installations, structures and vessels and for supply of any goods connected with the said activity

(1)

(3)

As an effect of this notification – The expression ‘India’, in addition including territorial waters, installations, structures and vessels in the whole of continental shelf of India and the exclusive economic zone of India, also includes the activities pertaining to construction of the said installations, structures and vessels for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof.

Effective from 01-03-2002 In the year 2002, Notification No. 1/2002 dated 01-03-2002, was issued to define the territory of India. This notification reads as under -

Service Tax Notification No. 1/2002-ST, dated 01-03-2002 In exercise of the powers conferred by clause (a) of sub-section (6) of Section 6, and clause (a) of sub-section (7) of Section 7, of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976 (80 of 1976), the Central Government hereby extends the provisions of Chapter V of the Finance Act (32 of 1994) to the designated areas 1 in the Continental Shelf and Exclusive Economic Zone of India as declared by the Notifications of the Government of India in the Ministry of External Affairs Nos. S.O. 429(E), dated the 18th July, 1986 and S.O. 643(E), dated the 19th September, 1996 with immediate effect.

As an effect of this notification – The expression ‘India’, in addition to territorial waters, included designated areas of Continental Shelf, Exclusive Economic Zone also.

In the year 2009, the Government amended the above Notification vide Notification No. 21/2009-ST, dated 07-07-2009. This amended notification was effective from 07-072009 to 26-02-2010, and read as under— In exercise of the powers conferred by clause (a) of sub-section (6) of Section 6, and clause (a) of sub-section (7) of Section 7, of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976 (80 of 1976), the Central Government hereby extends the provisions of Chapter V of the Finance Act (32 of 1994) to

1. Refer Notification No. S. O. 429(E), dated 18-07-1986 reproduced at the end of this Appendix to identify designated areas of Continental shelf and EEZ of India.

Territorial Jurisdiction of ‘India’

A-85

the 2[installations, structures and vessels in the continental shelf of India and the exclusive economic zone of India.]

From the above, it can be seen that from the period beginning from 01-03-2002 to 06-072009, the expression India included the designated areas in the Continental Shelf and Exclusive Economic Zone of India as declared by the Notifications of the Government of India in the Ministry of External Affairs Nos. S.O. 429(E), dated the 18th July, 1986 and S.O. 643(E), dated the 19th September, 1996 with immediate effect.

As an effect of this notification – The expression ‘India’, in addition to territorial waters, included installations, structures and vessels in the whole of continental shelf of India and the exclusive economic zone of India. However, because of the manner, this notification is worded; the jurisdiction of India could not be extended to the activities pertaining to construction of the said installations, structures and vessels. Therefore, the Government sought another change.

Before the above Notification issued in the year 2002, in the year 2001, for the first time, the expression “India” was explained in Circular No. 36/4-2001-ST, dated 08-10-2001 as under—

Service Tax Circular No. 36/4/2001-ST, dated 08-10-2001 The expression “India” includes the territorial waters of India. Indian territorial waters extend up to twelve nautical miles from the Indian land mass. Chapter V of the Finance Act which governs the levy of Service Tax has not extended the levy to designated areas in the Continental Shelf and the Exclusive Economic Zone of India (as has been done in case of Central Excise vide Notification No. 166/87-C.E., dated 11-06-1987 and in case of Customs

by Notification Nos. 11/87-Cus., dated 14-01-1987 and 64/97-Cus., dated 01-12-1997). It is, therefore, clarified that the services provided beyond the territorial waters of India are not liable to Service Tax as provisions of Service Tax have not been extended to such areas so far.

———

2 . Words “designated areas in the Continental Shelf and Exclusive Economic Zone of India as declared by the Notifications of the Government of India in the Ministry of External Affairs Nos. S.O. 429(E), dated the 18th July, 1986 and S.O. 643(E), dated the 19th September, 1996 with immediate effect” substituted vide Notification No. 21/2009-ST, dated 07-07-2009.