- 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)
- Circular no. 137/6/2011-ST, dated 20-4-2011
- Instruction No. 149 / 02 / 2008 – CX.4 dated 14-1-2008
- 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’.