As explained vide TRU Circular D.O.F. No. 334/13/2009-TRU, dated 6-7-2009 (Extracts) Cosmetic surgery and plastic surgery is undertaken to preserve or enhance physical appearance or beauty. Surgery is a medical technology consisting of a physical intervention on tissues. A procedure is considered surgical when it involves cutting of a patient’s tissues or closure of a previously sustained wound. Commonly surgery is performed in a sterile environment with anesthesia and antiseptic conditions using surgical instruments. It also includes ‘non-invasive’ surgery. Some of the commonly known aesthetic/cosmetic surgeries are abdominoplasty (tummy tuck); bletharoplasty (eyelid surgery); mammoplasty; buttock augmentation and lift; rhinoplasty (reshaping of nose); otoplasty (ear surgery); Rhytidectomy (face lift); liposuction (removal of fat from the body); brow lift; cheek augmentation; facial implants; lip augmentation; forehead lift; cosmetic dental surgery; orthodontics; aesthetic dentistry; laser skin surfacing etc. The present set of Taxable service envisages taxing these services as explained in the TRU Circular.
Such codes are no longer statutory but used for statistical purpose for the purpose of registration and for payment of tax as specified vide Circular No.165/16/2012 –ST dated 20.11.2012:
Tax Collection of Service
Interest and penalties on such service
Taxability as settled by precedents / Circulars / Trade notices
Whether falls within the scope of present service
Respondent engaged in the activity of various kinds of laser treatment for curing physical disorders/deformities and used for removal of facial and body hairs. The Tribunal held that removal of facial and body hairs by laser treatment is a service taxable under ‘Cosmetic surgery or plastic surgery services’ and not under ‘beauty treatment services’.
CCE, Vadodara Vs New Look Cosmetic Laser Centre 2009 (14) STR 27
Restoration of appearance/ anatomy/ bodily functions affected due to congenital effects, injury, trauma etc
DOF No. 334/13/2009 – Tru dated 6-7-2009
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 Cosmetic or plastic surgery 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 Cosmetic or plastic surgery Servicesis 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 Cosmetic or plastic surgery Services.
Provisions relating to Cenvat Credit
Since Services are fully taxable, Cenvat shall be available to service provider. However, if providing both taxable as well as non taxable services, Cenvat Credit as per Rule 6 of Cenvat Credit Rules, 2004 shall be available.
Provisions relating to point of taxation
The point of taxation will be governed by Rule 3 of Point of Taxation Rules, 2011. As per the said rules, the Point of Taxation will be the date of issue of invoice or the date of receipt of payment, whichever is earlier. In case the invoice is not issued within 30 days of booking (provision of service), the date of booking will be the point of taxation.
Provisions relating to Place of Provision of Service Rules, 2012
The Place of Provision of Service Rules, 2012 contains Rule 4, which provides for place of provision of services which are provided to an individual, represented either as the recipient of service or a person acting on behalf of the recipient, which require the physical presence of the receiver or the person acting on behalf of the receiver, with the provider for the provision of the service.
Para 5.4.3. of Taxation of Services – An Education Guide dated 20.06.2012 clarifies such cases as follows:
Certain services like cosmetic or plastic surgery, beauty treatment services, personal security service, health and fitness services, photography service (to individuals), internet café service, classroom teaching, are examples of services that require the presence of the individual receiver for their provision. As would be evident from these examples, the nature of services covered here is such as are rendered in person and in the receiver’s physical presence. Though these are generally rendered at the service provider’s premises (at a cosmetic or plastic surgery clinic, or beauty parlor, or health and fitness center, or internet café), they could also be provided at the customer’s premises, or occasionally while the receiver is on the move (say, a personal security service; or a beauty treatment on board an aircraft).
In the above case, place of performance of service shall be the place where such services are actually performed.
Related Circulars and Notification
Relevant extract of Circular letter D.O.F. No. 334/13/2009-TRU, dated 6-7-2009
2.4.1 Beauty treatment service provided by saloons, beauty parlours and beauticians are taxable since 2002. The service now proposed to be taxed is cosmetic surgery and plastic surgery undertaken to preserve or enhance physical appearance or beauty. As per common definition, surgery is a medical technology consisting of a physical intervention on tissues. As a general rule, a procedure is considered surgical when it involves cutting of a patient’s tissues or closure of a previously sustained wound. Commonly surgery is performed in a sterile environment with anesthesia and antiseptic conditions using surgical instruments. It also includes ‘non-invasive’ surgery.
2.4.2 Some of the commonly known aesthetic/cosmetic surgeries are abdominoplasty (tummy tuck); bletharoplasty (eyelid surgery); mammoplasty; buttock augmentation and lift; rhinoplasty (reshaping of nose); otoplasty (ear surgery); Rhytidectomy (face lift); liposuction (removal of fat from the body); brow lift; cheek augmentation; facial implants; lip augmentation; forehead lift; cosmetic dental surgery; orthodontics; aesthetic dentistry; laser skin surfacing etc.
2.4.3 However, any reconstructive surgery undertaken to restore one’s appearance, anatomy or bodily functions affected due to congenital defects, developmental abnormalities, degenerative diseases, injury or trauma would be outside the scope of this service. These processes could be undertaken to correct impairment caused by burns, fractures or congenital abnormalities like cleft lip etc.