- Extracts of Circular F. No. BII/3/98-TRU, dated 7-10-1998trade notice no. 7/98-ST, dated 13-10-1998, Mumbai Commissionerate
4.4 As per section 65(20) “interior decorator” means any person engaged, whether directly or indirectly, in the business of providing by way of advice, consultancy, technical assistance or in any other manner, services related to planning, design or beautification of spaces, whether man-made or otherwise and includes a landscape designer. The “taxable service” in the case of an interior decorator means any service provided to a client in relation to planning, design or beautification of spaces, whether man-made or otherwise, in any manner.
4.5 An issue has been raised as regards the basis on which determination of the service tax liability on ongoing projects (on the date of service tax coming into effect) is to be made. In this regard it is clarified that service tax is payable only in respect of services rendered on or after the date on which the service tax provisions come into force. Service tax is not required to be paid on payments received for services rendered prior to the service tax concerned being notified.
4.6 Further, in cases where an architect/interior decorator sub-contracts part/whole of his work to another architect/interior decorator, it is clarified that no service tax is required to be paid by the sub-contractor provided that the principal architect/interior decorator has paid the service tax on the services rendered by him to the client and provided the sub-contracting is in respect of the same service category. In other words work is sub-contracted by one architect to another architect. In such cases, if the principal architect pays the service tax on services rendered by him to his client, the sub-contracting architect is not required to pay the service tax. However, service tax would be required to be paid in a case where sub-contracting is to a different service category.
For example, where an architect sub-contracts his work to a consulting engineer, then service tax would be required to be paid by both the architect and the consulting engineer on the services rendered by them. Similarly, a market research agency would be required to pay service tax on services rendered by it to an advertising agency, even if the advertising agency is also liable to pay service tax on the amount billed to its client for advertising services (which inter alia, includes the amount paid by the advertising agency for such market research services to the market research agency).
4.7 It is also clarified that service tax is not leviable on supply of materials, items of furniture or decoration, per se, but on services, rendered in any manner, concerning planning, design or beautification of spaces. Also the services rendered by Art directors of films and others who render services of design etc. for setting up temporary structures/settings for shootings etc. do not attract the service tax levy as such interior decoration has no permanency and is only of a temporary nature.