Verification of the details given to the bank by the loan seekers by the applicant cannot be treated as promoting their business and hence would be charged to service tax under business support service and not under business auxiliary services.
S.R. Kalyanakrishnan Vs CCE, Cochin [2008 12 STT 454]
Service provided arranging transmission of electric energy to reduce losses
M.P. Power Transmission Co. Ltd. v CCE, Bhopal [2008 15 STT 222]
Activity of delivery of vehicles from factory premises to the registered sales office
Canara Motors V CCE [(2011) 30 STT 257]
assistance directly to individuals for obtaining visa
Circular No. 137/6/2011-ST, dated 20-4-2011
Assisting, processing of purchase order, monitoring progress and timely execution of export orders
Fifth Avenue V CST, Chenaai 2009 (15) STR 387
Address verification services provided by post office to BSNL
Instruction No 149/02/2008-CX.4, dated 14.01.2008
Value of Taxable Service
Section 67 read along with Service Tax (Determination of Value) Rules, 2006 provides the manner of determining the value of taxable services on which services tax should be levied.
In respect of Business Support Service Services, no specific provision for determination of taxable value has been provided. However it has been clarified that the value of taxable services is the total amount of consideration consisting of all components of the taxable service and it is immaterial that the details of individual components of the total consideration are indicated separately in the invoice. Thus, the value of taxable Business Support Service is to be determined in terms of provision of Section 67 read with the prescribed Rules.
No abatement has been granted to any person liable to pay service tax under the Section.
Small Service Provider
Vide Notification No 33/2012-ST, dated 20.06.2012 – Exemption to Small service providers having taxable turnover of less than 10 Lakhs and providing services other than by way of under a brand name.
Import of Technology
Vide Notification No. 14/ 2012-ST, dated March 17, 2012 – Exemption in respect of Taxable service involving import of technology, from so much of service tax, as is equivalent to the extent of amount of R&D Cess payable on the said transfer of technology under the provisions of section 3 of the Research and Development Cess Act, 1986.
To Foreign Diplomatic missions and their personnel
Vide Notification No 27/2012-ST, dated 20.06.2012 – Exemption for all the taxable services provided by any person, for the official use of a foreign diplomatic mission or consular post in India, or for personal use or for the use of the family members of diplomatic agents or career consular officers posted therein.
Services by TBI or STEP
Vide Notification No 32/2012-ST, dated 20.06.2012 – All taxable services provided by TBI or STEP have been exempted
Services provided to SEZ
Vide Notification No 40/2012-ST, dated 20.06.2012, all taxable services received by a Unit located in a Special Economic Zone (SEZ) or Developer of SEZ for the authorized operations, has been exempted from the levy of whole of the service tax.
No Specific Exemption had been granted by the government in case of these Services.
Related Circulars and Notification
CBEC letter F.No. 137/131/2007-CX-4, dated 12-12-2007 (issued from file c. No.iv/16/06/2008-stu)/trade notice no. 5/2008/ST, no. 2/2008, dated 5-2-2008, Madurai Commissionerate
Relevant extracts of letter no. DOF 334/3/2011-TRU, dated 28-2-2011 (annexure b)
CBEC letter F.No. 137/131/2007-CX-4, dated 12-12-2007 (issued from file c.no.iv/16/06/2008-STU)/Trade Notice No. 5/2008/ST, No. 2/2008, dated 5-2-2008, Madurai Commissionerate
A copy of Board’s letter F.No. 137/131/2007-CX-4, dated 12-12-2007 (Annex) issued by the Government of India, Ministry of Finance, Department of Revenue, New Delhi is communicated herewith for information, guidance and necessary action.
The contents of the above said letter may be brought to the notice of all the constituent members of your Trade Association.
Letter F. No. 137/131/2007-CX.4, dated 12-12-2007
Postal Department has engaged shipping companies for conveyance of outwards surface Indian Postal Mails to various ports of foreign countries and handling of export cargo or passenger baggage etc. From the facts mentioned it appears that the service provided by shipping companies is in the nature of ‘distribution, management and logistics’ and delivery order charges and inland haulage charges collected by shipping companies are for such ‘distribution, management and logistics’ service. Such service is specifically covered under ‘business support services’ and is liable to service tax.
Relevant extracts of letter no. D.O.F. 334/3/2011-TRU, dated 28-2-2011 (Annexure b)
Business Support Service [section 65(105)(zzzq)] :
5.1 The scope of the service is being expanded to include operational or administrative assistance of any kind. The scope will cover all support activities for others on a contract or fee, that are ongoing business support functions that businesses and organizations commonly do for themselves but sometimes find it economical or otherwise worthwhile to outsource.
5.2 The words “operational and administrative assistance” have wide connotation and can include certain services already taxed under any other head of more specific description. The correct classification will continue to be governed by section 65A.
Circular No. 137/6/2011-ST, dated 20-4-2011
An issue has been brought before the Board, seeking a clarification as to whether service tax liability would arise on the assistance provided by visa facilitators, to individuals directly, for processing of visa applications.
The same has been examined. Assistance provided by a visa facilitator, for obtaining visa, to a visa applicant or for foreign employer does not fall within the scope of supply of manpower service. Visa facilitators, while providing visa assistance directly to individuals does not act on behalf of the embassies, as agents of the principal and hence service tax is not leviable within the meaning of business auxiliary service. Also where the assistance is rendered to an individual directly, by a visa facilitator, and the visa applicant pays the service charge on his own (meaning
such service charge is not borne by any business entity), the same cannot be considered as support service for business or commerce.
Visa facilitators, merely facilitate the procurement of visa and directly assist individuals who intend to travel abroad, to complete the immigration formalities. Visa facilitators collect certain statutory charges like visa fee, certification fee, attestation fee, emigration fee, etc. from the visa applicant, which are remitted to the respective authorities, and in addition collect service charges for themselves as remuneration for the assistance provided by them to obtain the visa. Such a service provided by a visa facilitator, in the form of assistance to individuals directly, to obtain a visa, does not fall under any of the taxable services under section 65(105) of the Finance Act,1994. Hence service tax is not attracted.
However, service tax is leviable on any service provided other than assistance directly to individuals for obtaining visa, falling under the description of any taxable service, as classifiable under the appropriate heading. To cite a few instances, where in addition to rendering assistance directly to individuals for obtaining visa, visa facilitators may also act as agents of recruitment or of foreign employer, in which case, service tax is leviable to the extent under the service of ‘supply of manpower’. In certain other cases, for example, a visa facilitator, may be rendering visa assistance to individuals who are employed in a business entity, but the service charge maybe paid by the business entity on behalf of those individuals, to the visa facilitator, in which case, service tax is leviable under ‘business support service’.