a knowledge workshop-presentation ii dated 14th july,2012

Corporate Knowledge Corporate Knowledge FoundationFoundation

PresentsPresentsA Knowledge WorkshopA Knowledge Workshop

OnOn““New Regime of Service Taxation in India”New Regime of Service Taxation in India”

Conducted byConducted byDr. Sanjiv AgarwalDr. Sanjiv Agarwal

FCA, FCSFCA, FCS

Saturday,Saturday,1414thth July,2012 July,2012New Delhi © Dr. Sanjiv New Delhi © Dr. Sanjiv

AgarwalAgarwal

22

SESSION - IISESSION - II

Negative List of ServicesNegative List of Services

&&

Exempted ServicesExempted Services

Corporate Knowledge Corporate Knowledge FoundationFoundation

33

Scope of Service TaxScope of Service Tax

Services on which Service Tax shall be attractedServices on which Service Tax shall be attracted comprise of :comprise of :

Those services which satisfy the definition of service u/s Those services which satisfy the definition of service u/s 65B (44) 65B (44)

Nine specified declared services u/s 66E Nine specified declared services u/s 66E Those services which do not find place in negative list of Those services which do not find place in negative list of

services u/s 66Dservices u/s 66D Those services which are not exempt from levy of Those services which are not exempt from levy of

Service Tax under Notification No. 25/2012-ST dated Service Tax under Notification No. 25/2012-ST dated 20.06.201220.06.2012

to be contd….to be contd….

Services on which no Service Tax shall be payable comprise of :Services on which no Service Tax shall be payable comprise of :• Service which are specifically excluded from the scope of Service which are specifically excluded from the scope of

definition of service itself u/s 65(44).definition of service itself u/s 65(44).• 17 broad services specified in the negative list of services 17 broad services specified in the negative list of services

u/s 66D.u/s 66D.• Services which are exempt from levy of Service Tax under N. Services which are exempt from levy of Service Tax under N.

No. 25/2012-ST dated 20.06.2012.No. 25/2012-ST dated 20.06.2012.• Specified services otherwise exempt under specific Specified services otherwise exempt under specific

notifications. notifications. • Activities where service provider and service receiver are in Activities where service provider and service receiver are in

non –taxable territorynon –taxable territory

44

Scope of Service TaxScope of Service Tax

Examples of new activities Examples of new activities which may be taxedwhich may be taxed

• Non commercial construction for non-government purposeNon commercial construction for non-government purpose• Private roads Private roads • Residential construction of more than one unitResidential construction of more than one unit• Commercial artists/performersCommercial artists/performers• Actors, directorsActors, directors• Reality show judgesReality show judges• Tourism boatsTourism boats• Board director’s sitting feeBoard director’s sitting fee• Non-compete feeNon-compete fee• Arbitrators to business entitiesArbitrators to business entities• Banking services to governmentBanking services to government• Unrecognized IPRsUnrecognized IPRs

to be contd..to be contd..55

Examples of new activities which Examples of new activities which

may be taxedmay be taxed

• Discourses and lecturesDiscourses and lectures• Services to RBIServices to RBI• Hotel Telephone CallsHotel Telephone Calls• Matrimonial sitesMatrimonial sites• AstrologersAstrologers

66

77

Negative list of ServicesNegative list of Services

What is negative listWhat is negative list

• Defined in new section 66DDefined in new section 66D

• Section 66D Specifies seventeen 17 broad categories of Section 66D Specifies seventeen 17 broad categories of services.services.

• Effective from 1-7-2012Effective from 1-7-2012

• If an activity meets theIf an activity meets the charactertics of ‘ service ‘, it is charactertics of ‘ service ‘, it is taxable unless specified in Negative List.taxable unless specified in Negative List.

• Based on socio-economic–tax criterionBased on socio-economic–tax criterion

88

Consideration in Negative ListConsideration in Negative List

Socio – Economic Considerations in Negative list Socio – Economic Considerations in Negative list

• Administrative considerations: taxation of Government, Administrative considerations: taxation of Government, difficult to tax sectors e.g. margin-based financial difficult to tax sectors e.g. margin-based financial services.services.

• Under contractual obligations: Specified international Under contractual obligations: Specified international bodies and diplomatic missionsbodies and diplomatic missions

• Welfare considerations: welfare of vulnerable sections of Welfare considerations: welfare of vulnerable sections of society, essential education, public health; public society, essential education, public health; public transport, services by non-profit entities, religious transport, services by non-profit entities, religious services, promotion of art, culture and sports.services, promotion of art, culture and sports.

• Economic considerations: transport of export goods, Economic considerations: transport of export goods, services meant for agriculture, animal husbandry and services meant for agriculture, animal husbandry and infrastructure development.infrastructure development.

• Explicit activities in the nature of services, which are Explicit activities in the nature of services, which are within the taxing powers of States: betting and lotteries, within the taxing powers of States: betting and lotteries, tolls.tolls.

99

Sectors in Negative ListSectors in Negative List

Negative list of services is drawn from seven sectors, viz.Negative list of services is drawn from seven sectors, viz.

• services provided by specified person ie, services provided by specified person ie, GovernmentGovernment

• social welfare & public utilitiessocial welfare & public utilities• financial sectorfinancial sector• transportation transportation • construction & real estateconstruction & real estate• educationeducation• health carehealth care• others & miscellaneous others & miscellaneous

1010

Services by Government or a Services by Government or a local authoritylocal authority

Services by Government or a local authority excluding the Services by Government or a local authority excluding the following services to the extent they are not covered elsewhere:following services to the extent they are not covered elsewhere:

• Services by the Department of Posts by way of speed post, Services by the Department of Posts by way of speed post, express parcel post, life insurance and agency services express parcel post, life insurance and agency services provided to a person other than Government;provided to a person other than Government;

• Services in relation to an aircraft or a vessel, inside or outside Services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;the precincts of a port or an airport;

• Transport of goods or passengers; orTransport of goods or passengers; or

• Support services provided to business entitiesSupport services provided to business entities

to be contd..to be contd..

Service provided by Service provided by Government or Local AuthorityGovernment or Local Authority

• Most of services provided by Central / State Most of services provided by Central / State Governments exempt from service tax.Governments exempt from service tax.

• But following services are But following services are taxabletaxable - - Department of posts - speed post, express Department of posts - speed post, express

parcel, life insurance and agency service parcel, life insurance and agency service to non to non governmentgovernment business entity but basic mail, business entity but basic mail, money orders, operation of saving money orders, operation of saving accounts ,pension payment etc services are accounts ,pension payment etc services are covered in negative listcovered in negative list

In relation to vessel or aircraft service In relation to vessel or aircraft service within/outside port/airportwithin/outside port/airport

Transport of goods and/ or passengersTransport of goods and/ or passengers Support service to business entities Support service to business entities

To be contd…..To be contd…..

Service provided by Government Service provided by Government or Local Authorityor Local Authority

• Services by government as sovereign functions (grant of Services by government as sovereign functions (grant of licensing rights or audit of government, passport etc.)licensing rights or audit of government, passport etc.)

• Excludes corporations formed under Central Acts or Excludes corporations formed under Central Acts or State Acts or various Government companies registered State Acts or various Government companies registered under Companies Act, 1956 or autonomous institutions under Companies Act, 1956 or autonomous institutions set up by a Special Acts set up by a Special Acts

• Government Department needs to be registered and to Government Department needs to be registered and to pay tax on support services ofpay tax on support services of Renting of immovable propertiesRenting of immovable properties Speed post, express parcel, life insurance.Speed post, express parcel, life insurance. Transport of goods and/ or passengers Transport of goods and/ or passengers Services in relation to vessel or aircraft Services in relation to vessel or aircraft

• For other services, government not liable to pay service For other services, government not liable to pay service tax as tax paid by service recipient in reverses charge tax as tax paid by service recipient in reverses charge (N. No. 30)(N. No. 30)

To be contd…..To be contd…..

Service provided by Government Service provided by Government or Local Authorityor Local Authority

““Support services" meansSupport services" means

infrastructural, infrastructural, operational, operational, administrative,administrative, logistic, logistic, marketing or marketing or any other support of any kind comprising functions that any other support of any kind comprising functions that

entities carry out in ordinary course of operations entities carry out in ordinary course of operations themselves but may obtain as services by outsourcing from themselves but may obtain as services by outsourcing from others for any reason whatsoever others for any reason whatsoever

shall include advertisement and promotion, construction or shall include advertisement and promotion, construction or works contract, renting of immovable property, security, works contract, renting of immovable property, security, testing and analysis;testing and analysis;

• Services provided by Government Security agencies are covered Services provided by Government Security agencies are covered under support service - under reverse charge, Service Receiver is under support service - under reverse charge, Service Receiver is liable to tax.liable to tax.

Service by Reserve Bank of Service by Reserve Bank of IndiaIndia

• All services provided All services provided byby RBI are in Negative RBI are in Negative ListList

• Service Provided Service Provided to to RBI is taxable unless RBI is taxable unless covered in negative list.covered in negative list.

• Service provided Service provided byby banks to RBI taxable banks to RBI taxable unless covered in Negative List or exempted unless covered in Negative List or exempted servicesservices

Services by a foreign diplomatic Services by a foreign diplomatic

mission located in India mission located in India • Services by diplomatic mission of any country located Services by diplomatic mission of any country located

in Indiain India• Does not cover services provided by any office or Does not cover services provided by any office or

establishment of an International organization establishment of an International organization (Section 3 of United Nation Privileges & Immunities (Section 3 of United Nation Privileges & Immunities Act 1947)Act 1947)

• Example- UNESCO, UNICEF, IMF, IBRD etcExample- UNESCO, UNICEF, IMF, IBRD etc• Notification No. 27/2012- ST dated 20.6.2012 Notification No. 27/2012- ST dated 20.6.2012

conditionally exempts service provided by any person conditionally exempts service provided by any person for the official use of a provision of a foreign diplomatic for the official use of a provision of a foreign diplomatic

mission or consular post in India mission or consular post in India for personal use or use of the family member of diplomatic for personal use or use of the family member of diplomatic

agents or career consular officers posted in Indiaagents or career consular officers posted in India

Service relating to Agriculture Service relating to Agriculture or Agricultural Produceor Agricultural Produce

services relating to agriculture by way of—(i) agricultural operations directly related to production of any

agricultural produce including cultivation, harvesting, threshing, plant protection or seed 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 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;

to be contd…to be contd…


The Services relating to agriculture or agriculture The Services relating to agriculture or agriculture

produce specified in negative list-produce specified in negative list- agricultural operations directly related to production of any agricultural operations directly related to production of any

agricultural produce including cultivation, harvesting, threshing, agricultural produce including cultivation, harvesting, threshing, plant protection or seed testing;plant protection or seed testing;

supply of farm labour;supply of farm labour; processes carried out at the agricultural farm including processes carried out at the agricultural farm including

tending, pruning, cutting, harvesting, drying cleaning, trimming, tending, pruning, cutting, harvesting, drying cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter essential packaging and such like operations which do not alter essential characteristics of agricultural produce but makes it only characteristics of agricultural produce but makes it only marketable for the primary market not for retail market; (e.g. marketable for the primary market not for retail market; (e.g. cleaning of Wheat)cleaning of Wheat)

to be contd …….to be contd …….


• renting of agro machinery or vacant land with or renting of agro machinery or vacant land with or without a structure incidental to its use (e.g. green without a structure incidental to its use (e.g. green house, storage shed.)house, storage shed.)

• loading, unloading, packing, storage and loading, unloading, packing, storage and warehousing of agricultural produce; warehousing of agricultural produce;

• agricultural extension services (application of agricultural extension services (application of scientific research, farmer education & training) scientific research, farmer education & training)

• services provided by any Agricultural Produce services provided by any Agricultural Produce Marketing Committee or Board (APMC) for Marketing Committee or Board (APMC) for agriculture or agricultural produce but does not agriculture or agricultural produce but does not include non -agricultural activities (e.g. renting of include non -agricultural activities (e.g. renting of shops or other property or services provided by shops or other property or services provided by commission agent for sale or purchase of commission agent for sale or purchase of agricultural produce)agricultural produce)


Service relating to Agriculture or Service relating to Agriculture or Agricultural ProduceAgricultural Produce

Agriculture -Section 65 B(3)Agriculture -Section 65 B(3)Cultivation of plants and rearing of all life-forms of Cultivation of plants and rearing of all life-forms of animals except the rearing of horses, for food, fiber, animals except the rearing of horses, for food, fiber, fuel, raw material or other similar productsfuel, raw material or other similar products

Agriculture Produce -Section 65B(5)Agriculture Produce -Section 65B(5)any produce of agriculture on which either no any produce of agriculture on which either no further processing is done or such processing is further processing is done or such processing is done as is usually done by a cultivator or producer done as is usually done by a cultivator or producer which does not alter its essential characteristics but which does not alter its essential characteristics but makes it marketable for primary market makes it marketable for primary market (E.g. (E.g. Plantation crops like rubber, tea or coffee but does Plantation crops like rubber, tea or coffee but does not include potato chips or tomato ketchup)not include potato chips or tomato ketchup)


Trading of GoodsTrading of Goods

• Trading of goods is not a taxable service, it being a Trading of goods is not a taxable service, it being a sale and not a service.sale and not a service.

• If a transaction is a sale, it is not a service and If a transaction is a sale, it is not a service and vice vice versaversa

• Transfer of title in goods is crucial Transfer of title in goods is crucial • Activities of a commission agent / clearing and Activities of a commission agent / clearing and

forwarding agent who sells goods on behalf of forwarding agent who sells goods on behalf of another for a commission are not trading of goods another for a commission are not trading of goods (Title of goods does not pass)(Title of goods does not pass)

• Forward contracts are in the nature of trading of Forward contracts are in the nature of trading of goods.goods.

• Future contracts are not trading of goods Future contracts are not trading of goods to be contd …….to be contd …….

Trading of GoodsTrading of Goods

Goods - Section 65B(25)Goods - Section 65B(25)““goods" meansgoods" means• every kind of movable property every kind of movable property • other than actionable claim and other than actionable claim and • money money • includes securities, growing crops, grass, and includes securities, growing crops, grass, and things attached to or forming part of the land things attached to or forming part of the land which are agreed to be severed before sale or which are agreed to be severed before sale or under the contract of saleunder the contract of sale

Process amounting to manufacture or Process amounting to manufacture or production of goodsproduction of goods

► process amounting to manufacture or production of goods" means a process 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 on which duties of excise are leviable under section 3 of the Central Excise Act, 1944 or any process amounting to manufacture of alcoholic liquors for Act, 1944 or any process amounting to manufacture of alcoholic liquors for human consumption, opium, Indian hemp and other narcotic drugs and human consumption, opium, Indian hemp and other narcotic drugs and narcotics on which duties of excise are leviable under any State Act for the narcotics on which duties of excise are leviable under any State Act for the time being in force.time being in force.

► Covers manufacturing activity carried out on contract or job work basis Covers manufacturing activity carried out on contract or job work basis where where Transfer of title of goods is not involvedTransfer of title of goods is not involved Duties of excise are leviable on such processDuties of excise are leviable on such process

2222

What is Excisable GoodsWhat is Excisable Goods

► ““excisable goods” means goods specified in the First excisable goods” means goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 as being subject to a duty of excise and includes saltAct, 1985 as being subject to a duty of excise and includes salt

► Mobility and marketability are essential conditionsMobility and marketability are essential conditions► Goods includes any article, material or substance which is Goods includes any article, material or substance which is

capable of being bought and sold for a consideration and such capable of being bought and sold for a consideration and such goods shall be deemed to be marketable.goods shall be deemed to be marketable.

Exemption Service - Clause Exemption Service - Clause 3030

Carrying out an intermediate production process as job work in relation to Carrying out an intermediate production process as job work in relation to --(a) agriculture, printing or textile processing;(a) agriculture, printing or textile processing;(b) cut and polished diamonds and gemstones; or plain and studded (b) cut and polished diamonds and gemstones; or plain and studded jewellery of gold and other precious metals, falling under Chapter 71 of jewellery of gold and other precious metals, falling under Chapter 71 of the Central Excise Tariff Act ,1985 (5 of 1986)the Central Excise Tariff Act ,1985 (5 of 1986)(c) any goods on which appropriate duty is payable by the principal (c) any goods on which appropriate duty is payable by the principal manufacturermanufacturer oror(d) processes of electroplating, zinc plating, anodizing, heat treatment, (d) processes of electroplating, zinc plating, anodizing, heat treatment, powder coating, painting including spray painting or auto black, during powder coating, painting including spray painting or auto black, during the course of manufacture of parts of cycles or sewing machines upto an the course of manufacture of parts of cycles or sewing machines upto an aggregate value of taxable service of the specified processes of one aggregate value of taxable service of the specified processes of one hundred and fifty lakh hundred and fifty lakh rupees in a financial year subject to the rupees in a financial year subject to the condition that such aggregate value had not exceeded one hundred and condition that such aggregate value had not exceeded one hundred and fifty lakh rupees during the preceding financial yearfifty lakh rupees during the preceding financial year

Selling of space or time slots for Selling of space or time slots for advertisementsadvertisements

Selling of space or time slots for advertisements other Selling of space or time slots for advertisements other than than

advertisements broadcast by radio or television advertisements broadcast by radio or television

This entry in negative list should qualify the following This entry in negative list should qualify the following tests –tests –• involves selling of space (in case of print media)involves selling of space (in case of print media)• involves selling of time slots ( in case of electronic media)involves selling of time slots ( in case of electronic media)• purpose of selling time slots / space to be for purpose of selling time slots / space to be for

advertisements (publicity / sales promotion, awareness etc.)advertisements (publicity / sales promotion, awareness etc.)• excludes broadcast by radio or television ( i.e. broadcast excludes broadcast by radio or television ( i.e. broadcast

will be taxable)will be taxable)to be contd …….to be contd …….


TaxableTaxable Non-taxableNon-taxable

Sale of space or time for Sale of space or time for advertisement to be broadcast on advertisement to be broadcast on radio or television radio or television

Sale of space for advertisement inSale of space for advertisement in

print mediaprint media

Sale of time slot by a broadcastingSale of time slot by a broadcasting

organization organization Sale of space for advertisement in Sale of space for advertisement in billbill

boards, public places (including boards, public places (including

stadia), buildings, conveyances, cell stadia), buildings, conveyances, cell

phones, automated teller machines, phones, automated teller machines, internetinternet

Aerial advertisingAerial advertising

Presentation made in person Presentation made in person


““Advertisement" meansAdvertisement" means • any form of presentation for promotion of,any form of presentation for promotion of,• or bringing awareness about, or bringing awareness about, • any event,any event,• idea, idea, • immovable property, immovable property, • person, service,person, service,• goods or actionable claim through goods or actionable claim through • newspaper, television, radio or any other meansnewspaper, television, radio or any other means• but does not include any presentation made in person;but does not include any presentation made in person;• Services provided by advertisement agencies relating to Services provided by advertisement agencies relating to

preparation / designing etc of advertisements are taxable.preparation / designing etc of advertisements are taxable.• Print media includes newspaper and books.Print media includes newspaper and books.

Service way of access to a road or Service way of access to a road or a bridge on payment of toll a bridge on payment of toll

chargescharges

• Only covers toll charges for access to road and Only covers toll charges for access to road and bridgebridge

• Includes National highways or state highways.Includes National highways or state highways.• Toll on other roads not in negative listToll on other roads not in negative list• Collection charges or service charges paid to any Collection charges or service charges paid to any

toll collection agency are not covered under toll collection agency are not covered under negative listnegative list

• Dose not include services used for providing such Dose not include services used for providing such serviceservice

Betting, Gambling or Betting, Gambling or LotteryLottery

Betting or Gambling meansBetting or Gambling means • putting on stake something of value, putting on stake something of value, • particularly money, particularly money, • with consciousness of risk and hope of gain on the with consciousness of risk and hope of gain on the

outcome of a game or a contest, outcome of a game or a contest, • whose result may be determined by chance or accident, or whose result may be determined by chance or accident, or

on the likelihood of anything occurring or not occurringon the likelihood of anything occurring or not occurring• Betting is a form of wagering contract in which money or Betting is a form of wagering contract in which money or

money’s worth is made payable by the parties on the result of money’s worth is made payable by the parties on the result of an uncertain event, usually a game or sportan uncertain event, usually a game or sport

• Gambling means playing game of chance for money or risky Gambling means playing game of chance for money or risky action undertaken with the hope of successaction undertaken with the hope of success

• Lottery is a game of chance (e.g. lottery, bingo, lotto etc.) Lottery is a game of chance (e.g. lottery, bingo, lotto etc.) which may include online gameswhich may include online games


Betting, Gambling or LotteryBetting, Gambling or Lottery

• Auxiliary services for organizing or promoting betting Auxiliary services for organizing or promoting betting or gambling events are not covered in negative listor gambling events are not covered in negative list

• State subject covered in list IIState subject covered in list II• Actionable claim Actionable claim • In In Union of India & Others v. Martin Lottery Agencies Union of India & Others v. Martin Lottery Agencies

Ltd (2009) 14 STR 593 (Supreme Court),Ltd (2009) 14 STR 593 (Supreme Court), it was held it was held that service tax can not be levied on sale of lottery that service tax can not be levied on sale of lottery ticketticket

• In In Martin Lottery Agencies Ltd. v. Union of India Martin Lottery Agencies Ltd. v. Union of India (2007) 8 STR 561 (Sikkim),(2007) 8 STR 561 (Sikkim), it was held that petitioner it was held that petitioner was not rendering services in relation to promotion was not rendering services in relation to promotion of client’s goods and service tax liability did not ariseof client’s goods and service tax liability did not arise

Admission to entertainment Admission to entertainment events and access to amusement events and access to amusement

facilitiesfacilities

‘‘Entertainment event’ if it is intended (may not Entertainment event’ if it is intended (may not necessarily provide) to provide any one or more of necessarily provide) to provide any one or more of the following to the recipients / viewers / audience the following to the recipients / viewers / audience • recreation recreation • pastimepastime• fun , or fun , or • enjoyment enjoyment


Admission to entertainment Admission to entertainment events and access to events and access to amusement facilitiesamusement facilities

This could be by way of – This could be by way of – • exhibition of cinematographic filmexhibition of cinematographic film• circus circus • concerts concerts • sporting events sporting events • pageants pageants • award functions award functions • dance performance dance performance • musical performance musical performance • theatrical performances – drama, ballets or any theatrical performances – drama, ballets or any

such event / programme. such event / programme. to be contd …….to be contd …….

Admission to entertainment Admission to entertainment events and access to events and access to amusement facilitiesamusement facilities

““Amusement facility" means Amusement facility" means • a facility where fun a facility where fun • recreation is provided by means of rides recreation is provided by means of rides • gaming devices gaming devices • bowling alleys in amusement parksbowling alleys in amusement parks• amusement arcadesamusement arcades• water parkswater parks• theme parks theme parks • such other places such other places • but does not include a place within such facility but does not include a place within such facility

where other services are providedwhere other services are providedto be contd …….to be contd …….

Admission to entertainment Admission to entertainment events and access to amusement events and access to amusement

facilitiesfacilities• Amusement means entertainment, diversion, Amusement means entertainment, diversion,

pastime, sport etc. pastime, sport etc. • Theatrical performances need not be performed Theatrical performances need not be performed

in theatre in theatre • Standalone amusement ride in a mall – fun or Standalone amusement ride in a mall – fun or

recreation by means of ride – covered under recreation by means of ride – covered under amusement – excluded amusement – excluded

• Membership of club which provides amusement Membership of club which provides amusement facilities - excludedfacilities - excluded

• Event manager for organizing an entertainment Event manager for organizing an entertainment event or entertainment is not cover in this event or entertainment is not cover in this category category

Transmission or distribution of Transmission or distribution of Electricity by an electricity Electricity by an electricity

transmission or distribution utilitytransmission or distribution utility

• Provided by Electricity Transmission or Provided by Electricity Transmission or Distribution utility Distribution utility

• Covers both – Covers both – • TransmissionTransmission• Distribution Distribution

• Installation of gensets or similar equipment by Installation of gensets or similar equipment by private contractor for distribution - taxableprivate contractor for distribution - taxable

• Charges collected by developer or a housing Charges collected by developer or a housing society for distribution of electricity within a society for distribution of electricity within a residential complex - taxable but excluded if it residential complex - taxable but excluded if it acts as a licensed authority acts as a licensed authority

Specified services relating Specified services relating to educationto education

• Service by way of -Service by way of -i.i. Pre-school education and education up to Pre-school education and education up to

higher secondary school or equivalenthigher secondary school or equivalentii.ii. Education as a part of a prescribed Education as a part of a prescribed

curriculum for obtaining a qualification curriculum for obtaining a qualification recognized by law recognized by law

iii.iii. Education as a part of an approved Education as a part of an approved vocational education coursevocational education course

• Conduct of degree courses by colleges, Conduct of degree courses by colleges, universities or universities or institutions which lead to grant institutions which lead to grant of qualifications of qualifications recognized by law recognized by law


Specified services relating to Specified services relating to educationeducation

Approved vocational education courseApproved vocational education course a course run by an industrial training institute or an a course run by an industrial training institute or an

industrial training centre affiliated to the National Council industrial training centre affiliated to the National Council for Vocational Training, offering courses in designated for Vocational Training, offering courses in designated trades as notified under the Apprentices Act, 1961trades as notified under the Apprentices Act, 1961

a Modular Employable Skill Course, approved by the a Modular Employable Skill Course, approved by the National Council of Vocational Training, run by a person National Council of Vocational Training, run by a person registered with the Directorate General of Employment and registered with the Directorate General of Employment and Training, Ministry of Labour and Employment, Government Training, Ministry of Labour and Employment, Government of Indiaof India

a course run by an institute affiliated to the National Skill a course run by an institute affiliated to the National Skill Development Corporation set up by the Government of Development Corporation set up by the Government of IndiaIndia



• Education upto higher secondary school or Education upto higher secondary school or equivalent are in negative list.equivalent are in negative list.

• Services provided Services provided toto or or bby an educational institution y an educational institution for Auxiliary educational services and renting of for Auxiliary educational services and renting of immovable property – exempted under mega immovable property – exempted under mega notificationnotification

Negative list will not include – Negative list will not include – • Private tuitions Private tuitions • Education as a part of prescribed curriculum for Education as a part of prescribed curriculum for

obtaining qualification recognized by law of a obtaining qualification recognized by law of a foreign county foreign county

• Services provided to educational institutions Services provided to educational institutions • Placement services Placement services



Education related services not in negative list but Education related services not in negative list but exempt from tax under Notification No. 25/2012-ST exempt from tax under Notification No. 25/2012-ST dated 20.06.2012 dated 20.06.2012

• Transportation of students to / from Transportation of students to / from institutions institutions

• Provision of mid-day meal in schools Provision of mid-day meal in schools • Admission related services to educational Admission related services to educational

institutes where education services are institutes where education services are exempt.exempt.

• Coaching / training in recreational activities of Coaching / training in recreational activities of arts, culture or sports. arts, culture or sports.

Services by way of renting of Services by way of renting of residential dwelling for use as residential dwelling for use as

residenceresidence

Renting coves all types of arrangements in relation to Renting coves all types of arrangements in relation to immovable property with or without its transfer of immovable property with or without its transfer of possession or control and whether wholly or partly. It possession or control and whether wholly or partly. It would cover / include – would cover / include – • allowing allowing • permitting permitting • granting access / entry / occupation granting access / entry / occupation • use of facility use of facility • letting letting • leasing leasing • licensing, or licensing, or • other similar arrangements other similar arrangements (such as right to use, sub-lease, space sharing etc.) (such as right to use, sub-lease, space sharing etc.)


Services by way of renting of residential Services by way of renting of residential dwelling for use as residencedwelling for use as residence

Renting of certain kinds of property already covered Renting of certain kinds of property already covered inin

the negative listthe negative list• renting of vacant land, with or without a structure renting of vacant land, with or without a structure

incidental to its use, relating to agriculture. incidental to its use, relating to agriculture. • renting of residential dwelling for use as residence renting of residential dwelling for use as residence • renting out of any property by Reserve Bank of India renting out of any property by Reserve Bank of India • renting out of any property by a Government or a renting out of any property by a Government or a

local authority to non-business entity local authority to non-business entity


Services by way of renting of Services by way of renting of residential dwelling for use as residential dwelling for use as

residenceresidence

• Residential dwelling not defined but includes Residential dwelling not defined but includes residential accommodationresidential accommodation

• does not include hotel, motel, inn, Guest house, does not include hotel, motel, inn, Guest house, camp site, lodge, house boat or other placement camp site, lodge, house boat or other placement temporary staytemporary stay

• Residential dwelling used partly as a residence and Residential dwelling used partly as a residence and partly for non residential purpose- treated as bundled partly for non residential purpose- treated as bundled serviceservice

• Residential unit – independent residential unit with Residential unit – independent residential unit with specific facilities for living, cooking and sanitationspecific facilities for living, cooking and sanitation


Financial ServicesFinancial Services

Services by way of—(i) extending deposits, loans or advances in so far as the consideration is represented byway 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;



• Transactions in money outside the ambit of ‘service’Transactions in money outside the ambit of ‘service’• Any activity related to a transaction in money by way Any activity related to a transaction in money by way

of its use or conversion by cash or by any other of its use or conversion by cash or by any other mode, from one form , currency or denomination to mode, from one form , currency or denomination to another form, currency or denomination would not be another form, currency or denomination would not be treated as a transaction in money if a separate treated as a transaction in money if a separate consideration is charged for such an activityconsideration is charged for such an activity

• Service tax levied on service charges for transactions Service tax levied on service charges for transactions in money including of charges for making of drafts, in money including of charges for making of drafts, letter of credits issuance charges, service charges letter of credits issuance charges, service charges relating to issuance of CDs/ CPs etcrelating to issuance of CDs/ CPs etc

• Interest rate swaps and foreign exchange swaps are Interest rate swaps and foreign exchange swaps are excluded being securities and hence excludedexcluded being securities and hence excluded


Financial SectorFinancial Sector

• Only interest and discount are in negative listOnly interest and discount are in negative list• Interest onInterest on

Money borrowed Money borrowed Debt incurredDebt incurred DepositDeposit Claim / obligation/ similar rightClaim / obligation/ similar right

• Service charge / fee/ commission not covered (e.g. Service charge / fee/ commission not covered (e.g. pre payment fee, late fee, cheque bounce charges)pre payment fee, late fee, cheque bounce charges)

• interest on credit facility not utilized (commitment interest on credit facility not utilized (commitment charges ) not coveredcharges ) not covered

• Bill discounting – only discount coveredBill discounting – only discount coveredto be contd …….to be contd …….


• Any charges over and above interest/ discount Any charges over and above interest/ discount taxabletaxable

• Purchase/ sale of foreign currency between banks Purchase/ sale of foreign currency between banks and authorized dealers under negative listand authorized dealers under negative list

• Examples of services in negative list-Examples of services in negative list- Fixed deposits or saving deposits or any other such Fixed deposits or saving deposits or any other such

deposits in a bank for which return is received by way of deposits in a bank for which return is received by way of interestinterest

Providing a loan or over draft facility for in consideration Providing a loan or over draft facility for in consideration for payment of interestfor payment of interest

Mortgages or loans with a collateral security to the extent Mortgages or loans with a collateral security to the extent that the consideration for advancing such loans or that the consideration for advancing such loans or advances are represented by way of interestadvances are represented by way of interest

Corporate deposits to the extent that the consideration for Corporate deposits to the extent that the consideration for advancing such loans or advances are represented by way advancing such loans or advances are represented by way of interest or discountof interest or discount

Services relating to Services relating to transportation of passengerstransportation of passengers

Services by-Services by-• a stage carriage;a stage carriage;• railways in a class other than railways in a class other than

(i) first class; or (i) first class; or (ii) an AC coach; ( now exempt under Notification No (ii) an AC coach; ( now exempt under Notification No 43/2012)43/2012)

• metro, monorail or tramway;metro, monorail or tramway;• inland waterways;inland waterways;• public transport, other than predominantly for public transport, other than predominantly for

tourism purpose, in a vessel, between places tourism purpose, in a vessel, between places located in India; andlocated in India; and

• metered cabs, radio taxis or auto rickshaws.metered cabs, radio taxis or auto rickshaws.to be contd …….to be contd …….


• ‘‘Stage Carriage’ is defined in section 2(40) of Motor Stage Carriage’ is defined in section 2(40) of Motor Vehicles Act, 1988. It means a motor vehicle Vehicles Act, 1988. It means a motor vehicle constructed or adapted to carry more than six constructed or adapted to carry more than six passengers excluding the driver for hire or reward at passengers excluding the driver for hire or reward at separate fares paid by or for individual passengers, for separate fares paid by or for individual passengers, for the whole journey or for stages of the journeythe whole journey or for stages of the journey

• National waterways covered in inland waterways National waterways covered in inland waterways • Metered cab - any contract carriage on which an Metered cab - any contract carriage on which an

automatic device, of the type and make approved by automatic device, of the type and make approved by the State Transport Authority, is fitted which indicates the State Transport Authority, is fitted which indicates reading of the fare chargeable at any moment and reading of the fare chargeable at any moment and that is charged accordingly under the conditions of its that is charged accordingly under the conditions of its permit issued under the Motor Vehicles Act, 1988 permit issued under the Motor Vehicles Act, 1988



Covered under negative listCovered under negative list Not Covered under negative Not Covered under negative listlist

Motor vehicles on hire to state Motor vehicles on hire to state transport undertaking (more transport undertaking (more taken 12 passengers)taken 12 passengers)

Motor vehicles to state Motor vehicles to state transport undertakingtransport undertaking

Exemption to Transport of Exemption to Transport of passengers by a contract passengers by a contract carriage carriage

No exemption for Tourism, No exemption for Tourism, conducted tours, chartered or conducted tours, chartered or hirehire

Service relating to transportation Service relating to transportation by Goodsby Goods

services provided in relation to services provided in relation to transportation of goods specified in the transportation of goods specified in the negative listnegative list • by road except the services of by road except the services of

(i) a goods transportation agency or(i) a goods transportation agency or

(ii) a courier agency(ii) a courier agency

• by aircraft or vessel from a place outside India up by aircraft or vessel from a place outside India up to the customs station of clearance in India; orto the customs station of clearance in India; or

• by inland waterways (agents covered)by inland waterways (agents covered)to be contd …….to be contd …….


• Services provided by GTA taxable except Services provided by GTA taxable except under under

separate exemption available for separate exemption available for • fruits, vegetables, eggs, milk, food grains or pulses in a fruits, vegetables, eggs, milk, food grains or pulses in a

goods carriage;goods carriage;• goods where gross amount charged on a consignment goods where gross amount charged on a consignment

transported in a single goods carriage does not exceed transported in a single goods carriage does not exceed one thousand five hundred rupees; orone thousand five hundred rupees; or

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

• Courier services – Express cargo service, Courier services – Express cargo service, angadia – taxableangadia – taxable



Nature of service relating Nature of service relating to transportation of Goodsto transportation of Goods

Whether covered in the Whether covered in the negative list entrynegative list entry

By railwaysBy railways NoNo

By air within the country or By air within the country or abroadabroad

NoNo

By a vessel in the coastal By a vessel in the coastal waterswaters

NoNo

By a vessel on a national By a vessel on a national waterwaywaterway

YesYes

Services provided by a GTAServices provided by a GTA NoNo

Funeral, Burial, Crematorium or Funeral, Burial, Crematorium or Mortuary Services including Mortuary Services including

Transportation of the deceasedTransportation of the deceased • Funeral Funeral • Burial Burial • Crematorium Crematorium • Mortuary Mortuary • Transportation of deceased Transportation of deceased

Exemptions under Service Exemptions under Service Tax General ExemptionsTax General Exemptions

Small Scale Exemption Small Scale Exemption • The threshold exemption limit of Rs. 10 lakh continues The threshold exemption limit of Rs. 10 lakh continues

to exist and it is over and above the exemptions to exist and it is over and above the exemptions notified in Notification No. 25/2012-ST dated 20.6.2012. notified in Notification No. 25/2012-ST dated 20.6.2012.

• W.e.f. 1.4.2012, aggregate value of Rs. 10 lakh would W.e.f. 1.4.2012, aggregate value of Rs. 10 lakh would mean the sum total of value of first consecutive mean the sum total of value of first consecutive invoices issued during a financial year, but does not invoices issued during a financial year, but does not include value charged in invoices towards such services include value charged in invoices towards such services which are exempt from whole of service taxwhich are exempt from whole of service tax. (Refer . (Refer Notification No. 33/2012-ST dated 20.6.2012)Notification No. 33/2012-ST dated 20.6.2012)

to be contd….to be contd….

Exemption under Service Exemption under Service Tax General ExemptionsTax General Exemptions

• W.e.f.1.07.2012, Notification No. 6/2005 as W.e.f.1.07.2012, Notification No. 6/2005 as amended shall no longer be applicable. amended shall no longer be applicable. There is a change in scope of There is a change in scope of aggregate aggregate valuevalue which shall mean as follows and which shall mean as follows and subject to following conditions-subject to following conditions- total of value of taxable services total of value of taxable services value shall be as charged in first consecutive value shall be as charged in first consecutive

invoices issued during financial yearinvoices issued during financial year value charged in invoices issued for taxable value charged in invoices issued for taxable

services which are exempt from whole of Service services which are exempt from whole of Service Tax shall be excluded in determining the Tax shall be excluded in determining the aggregate valueaggregate value


Exemption for Exporters/SEZExemption for Exporters/SEZ ► Transportation of export goods by Goods Transport Transportation of export goods by Goods Transport

Agency in a goods carriage received by an exporter for Agency in a goods carriage received by an exporter for transport of goods. transport of goods. (Refer Notification No. 31/2012- ST (Refer Notification No. 31/2012- ST dated 20.6.2012)dated 20.6.2012)

► Refund of service tax paid on all input taxable services Refund of service tax paid on all input taxable services received by an exporter of goods and used for export of received by an exporter of goods and used for export of goods, subject to certain specified conditions. goods, subject to certain specified conditions. (Refer (Refer Notification No. 39/2012-ST dated 20.6.2012)Notification No. 39/2012-ST dated 20.6.2012)

► Taxable services, received by a unit located in a Special Taxable services, received by a unit located in a Special Economic Zone or Developer of SEZ for the authorised Economic Zone or Developer of SEZ for the authorised operations. operations. (Refer Notification No. 40/2012-ST dated (Refer Notification No. 40/2012-ST dated 20.6.2012)20.6.2012)


Exemption for Exporters/SEZExemption for Exporters/SEZ ► Rebate of Service Tax paid on taxable services Rebate of Service Tax paid on taxable services

received by exporter of goods and used for export received by exporter of goods and used for export of goods, subject to conditions of goods, subject to conditions (Refer Notification (Refer Notification No. 41/2012-ST dated 29.6.2012)No. 41/2012-ST dated 29.6.2012)

► Exemption to services provided by commission Exemption to services provided by commission agent located outside India and engaged by Indian agent located outside India and engaged by Indian exporter for promotion of export goods exported exporter for promotion of export goods exported upto Service Tax calculated on 10% of free on upto Service Tax calculated on 10% of free on board value of export goods board value of export goods (Refer Notification No. (Refer Notification No. 42/2012-ST dated 29.6.2012) 42/2012-ST dated 29.6.2012)


Exemption to Import of TechnologyExemption to Import of Technology ► Taxable service involving import of technology, from so Taxable service involving import of technology, from so

much of service tax, as is equivalent to the extent of much of service tax, as is equivalent to the extent of amount of cess payable on the said transfer of technology amount of cess payable on the said transfer of technology under the provisions of section 3 of the Research and under the provisions of section 3 of the Research and Development Cess Act, 1986Development Cess Act, 1986.(Refer Notification No. .(Refer Notification No. 14/2012-ST dated 17.3.2012)14/2012-ST dated 17.3.2012)

Exemption for Services to Foreign Diplomatic MissionExemption for Services to Foreign Diplomatic Mission ► Taxable services provided for the official use of a foreign Taxable services provided for the official use of a foreign

diplomatic mission or consular post in India, or for diplomatic mission or consular post in India, or for personal use or for the use of the family members of personal use or for the use of the family members of diplomatic agents or career consular officers posted diplomatic agents or career consular officers posted therein. therein. (Refer Notification No. 27/2012-ST dated (Refer Notification No. 27/2012-ST dated 20.6.2012)20.6.2012)


Exemption to Services by TBI or STEP Exemption to Services by TBI or STEP ► Taxable services provided by a Technology Business Incubator Taxable services provided by a Technology Business Incubator

(TBI) or a Science and Technology Entrepreneurship Park (TBI) or a Science and Technology Entrepreneurship Park (STEP) recognized by the National Science and Technology (STEP) recognized by the National Science and Technology Entrepreneurship Development Board (NSTEDB) of the Entrepreneurship Development Board (NSTEDB) of the Department of Science and Technology, Government of India. Department of Science and Technology, Government of India. (Refer Notification No. 32/2012-ST dated 20.6.2012)(Refer Notification No. 32/2012-ST dated 20.6.2012)

Exemption to Renting of an Immovable PropertyExemption to Renting of an Immovable Property ► Taxable service of renting of an immovable property, from so Taxable service of renting of an immovable property, from so

much of the service tax leviable thereon, as is in excess of the much of the service tax leviable thereon, as is in excess of the service tax calculated on a value which is equivalent to the service tax calculated on a value which is equivalent to the gross amount charged for renting of such immovable property gross amount charged for renting of such immovable property less taxes on such property, namely property tax levied and less taxes on such property, namely property tax levied and collected by local bodies. (Refer Notification No. 29/2012-ST collected by local bodies. (Refer Notification No. 29/2012-ST dated 20.6.2012)dated 20.6.2012)


Exemption to Railway ServicesExemption to Railway Services Taxation of services of passenger Taxation of services of passenger

transportation by railways in first class / AC transportation by railways in first class / AC coach and transportation of goods by coach and transportation of goods by railways exempt upto 30 September, 2012 railways exempt upto 30 September, 2012 (Refer Notification No. 43/2012-ST dated (Refer Notification No. 43/2012-ST dated 2.7.2012) 2.7.2012)

Specific Exempted ServicesSpecific Exempted Services

(Vide mega Exemption Notification No. (Vide mega Exemption Notification No. 25/2012-ST dated 20.6.2012)25/2012-ST dated 20.6.2012)

►W.e.f. 1.7.2012W.e.f. 1.7.2012►Covers 39 specific exemptions Covers 39 specific exemptions ►Negative List services – not taxable at Negative List services – not taxable at

all ; can be amended only by parliament all ; can be amended only by parliament ►Exempted services – taxable but Exempted services – taxable but

exempt under notification; can be exempt under notification; can be modified by notification.modified by notification.

Services Provided to the United Services Provided to the United Nations or a Specified International Nations or a Specified International

OrganizationOrganization Services Provided to the United Nations or a Specified Services Provided to the United Nations or a Specified

International OrganizationInternational Organization• Service provided to all international organization are Service provided to all international organization are

not not

exempt but service to only specified international exempt but service to only specified international

organizations of united Nations (privileges and organizations of united Nations (privileges and immunities immunities

Act, 1947) are exemptAct, 1947) are exempt• Service provided for official use of foreign diplomatic Service provided for official use of foreign diplomatic

mission/ counselor post and personal use are mission/ counselor post and personal use are exempt vide N. No. 27/2012-ST dated 20.6.2012exempt vide N. No. 27/2012-ST dated 20.6.2012

Health Care ServicesHealth Care Services

Health care services by a clinical establishment, an Health care services by a clinical establishment, an authorised authorised

medical practitioner or para-medicsmedical practitioner or para-medicsWhat is health care What is health care

• ““Health care services” means any service by way of diagnosis Health care services” means any service by way of diagnosis or treatment or care or treatment or care

• For illness, injury, deformity, abnormality or pregnancy in For illness, injury, deformity, abnormality or pregnancy in any organization system of medicine and includes services by any organization system of medicine and includes services by way of supply of meals for the patient or transportation of the way of supply of meals for the patient or transportation of the patient to and from a clinical establishmentpatient to and from a clinical establishment

• Does not include hair transplant or cosmetic or plastic surgery, Does not include hair transplant or cosmetic or plastic surgery, except when undertaken to restore or to reconstruct anatomy except when undertaken to restore or to reconstruct anatomy or functions of body affected due to congenital defects, or functions of body affected due to congenital defects, developmental abnormalities, injury or trauma. developmental abnormalities, injury or trauma.


► All health care services shall not be exempt All health care services shall not be exempt but only recognized systems of medicine are but only recognized systems of medicine are covered under exemption. covered under exemption.

► Recognized systems of medicine include Recognized systems of medicine include • Allopathy Allopathy • Yoga Yoga • Naturopathy Naturopathy • Ayurveda Ayurveda • Homeopathy Homeopathy • Siddha Siddha • Unani Unani • Any other system of medicine that may be recognized Any other system of medicine that may be recognized

by Central Government.by Central Government.


““Authorised medical practitioner” meansAuthorised medical practitioner” means any medical practitioner registered with any of the Councils any medical practitioner registered with any of the Councils

of the recognised system of medicine of the recognised system of medicine includes medical professional having the requisite includes medical professional having the requisite

qualification to practice in any recognised system of qualification to practice in any recognised system of medicine as per any law for the time being in force. medicine as per any law for the time being in force.

medical practitioner is a physician or surgeonmedical practitioner is a physician or surgeon

Health care Services by a Clinical Health care Services by a Clinical Establishment or Authorized Medical Establishment or Authorized Medical

Practitioner or Para medicsPractitioner or Para medics““Clinical establishment” means Clinical establishment” means

• a hospital a hospital • nursing homenursing home• clinic,clinic,• sanatorium or an institution by, whatever name called,sanatorium or an institution by, whatever name called,• that offers services, or facilities requiring diagnosis or treatment that offers services, or facilities requiring diagnosis or treatment

or care foror care for• illness,illness,• injury,injury,• deformity,deformity,• abnormality or abnormality or • pregnancy, pregnancy,

• in any recognised system of medicine, established and in any recognised system of medicine, established and administered or maintained by any person or a place established administered or maintained by any person or a place established as an independent entity or a part of an establishment to carry as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases. out diagnostic or investigative services of diseases.


• Paramedics are trained health care Paramedics are trained health care professionals, e.g. nursing staff, professionals, e.g. nursing staff, physiotherapists, technicians, lab assistants physiotherapists, technicians, lab assistants etc. etc.

• The services to be exempt mustThe services to be exempt must• be health care servicesbe health care services• be provided by -be provided by -

(i) a(i) a clinical establishment, orclinical establishment, or(ii) an authorised medical practitioner, or (ii) an authorised medical practitioner, or (iii) para-medics(iii) para-medics

• Exempted under Notification No. 30/2011-ST Exempted under Notification No. 30/2011-ST dated 25.4.2011 w.e.f. 1.5.2011. dated 25.4.2011 w.e.f. 1.5.2011.

Services by a veterinary clinic in relation to health Services by a veterinary clinic in relation to health care of care of

animals or birds animals or birds • Health care services for animals and birds - Health care services for animals and birds -

ExemptedExempted• Such services are generally provided by a Such services are generally provided by a

veterinary clinicveterinary clinic• ‘ ‘Veterinary’ implies relating to the diseases, Veterinary’ implies relating to the diseases,

injuries and treatment of farm and domestic injuries and treatment of farm and domestic animals animals

Health Care of Animals or BirdsHealth Care of Animals or Birds

Services by way of Charitable Services by way of Charitable ActivitiesActivities

Services by an entity registered under section 12AA of the Services by an entity registered under section 12AA of the Income tax Income tax

Act, 1961 by way of charitable activitiesAct, 1961 by way of charitable activities

““Charitable activities”- Clause (k) means activities relating to – Charitable activities”- Clause (k) means activities relating to – (a) public health by way of – (a) public health by way of –

• care or counselling of -care or counselling of -(i) terminally ill persons or persons with severe (i) terminally ill persons or persons with severe

physical or mental disabilityphysical or mental disability(ii) persons afflicted with HIV or AIDS, or (ii) persons afflicted with HIV or AIDS, or (iii) persons addicted to a dependence-forming (iii) persons addicted to a dependence-forming

substance such as narcotics drugs or alcohol or substance such as narcotics drugs or alcohol or • public awareness of preventive health, family planning public awareness of preventive health, family planning

or prevention of HIV infection or prevention of HIV infection (b) advancement of religion or spirituality (b) advancement of religion or spirituality


(c) advancement of educational programmes or skill (c) advancement of educational programmes or skill development relating to,- development relating to,-

(I) abandoned, orphaned or homeless children (I) abandoned, orphaned or homeless children (II) physically or mentally abused and traumatized persons (II) physically or mentally abused and traumatized persons (III) Prisoners or (III) Prisoners or (IV) persons over the age of 65 years residing in a rural area (IV) persons over the age of 65 years residing in a rural area

(d) preservation of environment including watershed, (d) preservation of environment including watershed, forests and wildlife or forests and wildlife or

(e) advancement of any other object of general public (e) advancement of any other object of general public utility up to a value of twenty five lakhs rupees in utility up to a value of twenty five lakhs rupees in any FY provided that total value of such activities any FY provided that total value of such activities had not exceeded twenty five lakhs rupees during had not exceeded twenty five lakhs rupees during the preceding FYthe preceding FY


Conditions for this exemption -Conditions for this exemption - services should be provided by an entity services should be provided by an entity

registered u/s 12AA of Income Tax Act, registered u/s 12AA of Income Tax Act, 1961, and1961, and

services should be charitable activities (as services should be charitable activities (as above)above)

Services relating to Religious Place Services relating to Religious Place

and Religious Ceremonyand Religious Ceremony Services by a person by way of-Services by a person by way of-

renting of precincts of a religious place meant for general renting of precincts of a religious place meant for general public orpublic or

conduct of any religious ceremonyconduct of any religious ceremony• Renting of precinct of a religious place as well as conduct of Renting of precinct of a religious place as well as conduct of

any religious ceremony, both shall be exemptany religious ceremony, both shall be exempt• Religious place is a place which is primarily meant for Religious place is a place which is primarily meant for

conduct of prayers or worship pertaining to a religionconduct of prayers or worship pertaining to a religion• ‘ ‘Precincts’ means an area within the walls or perceived Precincts’ means an area within the walls or perceived

boundaries of a particular building or place; an enclosed or boundaries of a particular building or place; an enclosed or clearly defined area of ground around a cathedral, church, clearly defined area of ground around a cathedral, church, temple, college etc. temple, college etc.

Services relating to Religious Place Services relating to Religious Place and Religious Ceremonyand Religious Ceremony

• Exemption is available only if the place is meant for Exemption is available only if the place is meant for general publicgeneral public

• General public means the body of people at large General public means the body of people at large sufficiently defined by some common quality of sufficiently defined by some common quality of public or impersonal naturepublic or impersonal nature

• E.g.- if a marriage is performed in precincts of a E.g.- if a marriage is performed in precincts of a church by renting of that place, it would be exemptchurch by renting of that place, it would be exempt

Services provided by Services provided by arbitral tribunal arbitral tribunal

Services provided byServices provided by-- (a) an arbitral tribunal to -(a) an arbitral tribunal to - (i) any person other than a business entity; or(i) any person other than a business entity; or (ii) a business entity with a turnover up to rupees ten lakh in the (ii) a business entity with a turnover up to rupees ten lakh in the preceding financial year;preceding financial year; (b) an individual as an advocate or a partnership firm of advocates (b) an individual as an advocate or a partnership firm of advocates

by by way of legal services to,-way of legal services to,- (i) an advocate or partnership firm of advocates providing legal (i) an advocate or partnership firm of advocates providing legal services ; services ; (ii) any person other than a business entity; or(ii) any person other than a business entity; or (iii) a business entity with a turnover up to rupees ten lakh in the (iii) a business entity with a turnover up to rupees ten lakh in the preceding financial year; orpreceding financial year; or (c) a person represented on an arbitral tribunal to an arbitral (c) a person represented on an arbitral tribunal to an arbitral

tribunaltribunal

Services provided by Services provided by arbitral tribunalarbitral tribunal

Taxability for Arbitral TribunalTaxability for Arbitral Tribunal Sole / Panel Sole / Panel

to Arbitral Tribunal exemptto Arbitral Tribunal exemptto any person (non business entity) to any person (non business entity) exempt exempt to business entity (turnover upto 10 lakh) exemptto business entity (turnover upto 10 lakh) exemptto business entity (turnover > 10 lakh) taxed under reverse to business entity (turnover > 10 lakh) taxed under reverse chargecharge

Taxability for advocates Taxability for advocates Individual / firm Individual / firm to Individual / firm exemptto Individual / firm exemptto business entity (turnover upto 10 lakh) exemptto business entity (turnover upto 10 lakh) exemptto business entity (turnover > 10 lakh) taxed under reverse to business entity (turnover > 10 lakh) taxed under reverse chargecharge

• Firm includes LLPFirm includes LLP• Effectively, no tax to be paid by advocates / arbitral tribunal Effectively, no tax to be paid by advocates / arbitral tribunal • Legal services – advice, consultancy or assistance in any branch of law Legal services – advice, consultancy or assistance in any branch of law

in any manner, includes representational services (N. No. 25/2012-ST in any manner, includes representational services (N. No. 25/2012-ST dated 20.6.2012)dated 20.6.2012)

Services by way of technical Services by way of technical testing or analysis of newly testing or analysis of newly

developed drugsdeveloped drugsServices by way of technical testing or analysis of newly developed Services by way of technical testing or analysis of newly developed

drugs, drugs,

including vaccines and herbal remedies, on human participants by a including vaccines and herbal remedies, on human participants by a

clinical research organisation approved to conduct clinical trials by clinical research organisation approved to conduct clinical trials by the the

Drug Controller General of India Drug Controller General of India

Conditions to be satisfied – Conditions to be satisfied –

(a) service of conduct of technical testing and analysis (a) service of conduct of technical testing and analysis

(b) service in relation to newly developed drugs/vaccines/herbal (b) service in relation to newly developed drugs/vaccines/herbal remedies remedies

(c) service on human participants (c) service on human participants

(d) service by clinical research organization approved by Drug (d) service by clinical research organization approved by Drug Controller General of India. Controller General of India.

Services of training or coaching in Services of training or coaching in recreational activitiesrecreational activities

Services by way of training or coaching in recreational activities Services by way of training or coaching in recreational activities relating to relating to

arts, culture or sportsarts, culture or sports • Exemption is to training or coachingExemption is to training or coaching Such coaching or training must relate to any one or Such coaching or training must relate to any one or

more of —more of — arts, arts, culture, culture, sports sports

• Activities by performing artists in folk or classical Activities by performing artists in folk or classical art art forms of music, dance or theatre are not liable to forms of music, dance or theatre are not liable to service taxservice tax

Services provided to / by Services provided to / by

educational institutioneducational institution Services provided to or by an educational institution in respect of Services provided to or by an educational institution in respect of

education exempted from service tax, by way of -education exempted from service tax, by way of - auxiliary educational services or auxiliary educational services or renting of immovable propertyrenting of immovable property

• Auxiliary education services shall cover the services in relation to Auxiliary education services shall cover the services in relation to

educational activities only and include –educational activities only and include –i.i. any service relating to imparting any any service relating to imparting any

► skillskill► knowledgeknowledge► education education ► development of course conductdevelopment of course conduct► other knowledge enhancement activityother knowledge enhancement activity

ii.ii. whether for students or faculty whether for students or faculty

iii.iii. out sourced activities ordinarily carried out by educational institutions out sourced activities ordinarily carried out by educational institutions

Services provided to / by Services provided to / by educational institutioneducational institution

iii.iii. services in relation to – services in relation to – ► admission admission ► conduct of examinationconduct of examination► catering of students under any mid day meal scheme catering of students under any mid day meal scheme

sponsored by Government sponsored by Government ► TransportationTransportation of students or faculty of students or faculty

iv.iv. Services in relation to catering under mid day scheme and Services in relation to catering under mid day scheme and transportation were hitherto exempt under different transportation were hitherto exempt under different notifications under outdoor catering services and tour notifications under outdoor catering services and tour

operator’s servicesoperator’s services

Services provided to a recognised Services provided to a recognised

sports bodysports body Services provided to a recognized sports body by-Services provided to a recognized sports body by-

a)a) an individual as a player, referee, umpire, coach or team an individual as a player, referee, umpire, coach or team manager for participation in a sporting event organized by a manager for participation in a sporting event organized by a recognized sports body; recognized sports body;

b)b) another recognised sports body;another recognised sports body;► Recognized sports body include IOA, SAI, Intl0A, etcRecognized sports body include IOA, SAI, Intl0A, etc► Services by individual player, referee etc to sports body Services by individual player, referee etc to sports body

are exempt for participation in eventare exempt for participation in event► Services by one recognized sport body to other is exempt Services by one recognized sport body to other is exempt ► Services by individuals such as selectors, commentators, Services by individuals such as selectors, commentators,

curators, technical experts is not exempt curators, technical experts is not exempt ► Services provided to unrecognized franchisee of sport Services provided to unrecognized franchisee of sport

event taxable (eg: IPLevent taxable (eg: IPL) )

Services by way of sponsorship of Services by way of sponsorship of sporting events sporting events

Services by way of sponsorship of sporting events Services by way of sponsorship of sporting events organised-organised-

a)a) by a national sports federation, or its affiliated by a national sports federation, or its affiliated federations, where the participating teams or individuals federations, where the participating teams or individuals represent any district, state or zone; represent any district, state or zone;

b)b) by Association of Indian Universities, Inter-University by Association of Indian Universities, Inter-University Sports Board, School Games Federation of India, All India Sports Board, School Games Federation of India, All India Sports Council for the Deaf, Paralympic Committee of Sports Council for the Deaf, Paralympic Committee of India or Special Olympics Bharat; India or Special Olympics Bharat;

c)c) by Central Civil Services Cultural and Sports Board; by Central Civil Services Cultural and Sports Board; d)d) as part of national games, by Indian Olympic Association; as part of national games, by Indian Olympic Association;

orore)e) under Panchayat Yuva Kreeda Aur Khel Abhiyaan under Panchayat Yuva Kreeda Aur Khel Abhiyaan

(PYKKA) Scheme(PYKKA) Scheme

Services by way of sponsorship of Services by way of sponsorship of sporting events sporting events

• Events, i.e., tournaments or championships Events, i.e., tournaments or championships organized only by specified bodies in relation to organized only by specified bodies in relation to games, sport, cultural events etc – Exemptedgames, sport, cultural events etc – Exempted

• Any sponsorship of event organized by any other Any sponsorship of event organized by any other body like BCCI arranging IPL cricket tournament –body like BCCI arranging IPL cricket tournament –Not Exempted Not Exempted

• Vide N. No. 30/2012-ST dated 20.6.2012, entire Vide N. No. 30/2012-ST dated 20.6.2012, entire service tax is payable by the body corporate or service tax is payable by the body corporate or partnership firm receiving the service in India under partnership firm receiving the service in India under reverse charge method reverse charge method

Services provided to the Government, Services provided to the Government, a local authority or a governmental a local authority or a governmental

authorityauthority Services provided to the Government, a local authority or a Services provided to the Government, a local authority or a

governmental governmental authority by way ofauthority by way of constructionconstruction, , erection, commissioning, installation, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of -completion, fitting out, repair, maintenance, renovation, or alteration of -a)a) a civil structure or any other original works meant predominantly for a civil structure or any other original works meant predominantly for

use other than for commerce, industry, or any other business or use other than for commerce, industry, or any other business or profession;profession;

b)b) a historical monument, archaeological site or remains of national a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958);1958 (24 of 1958);

c)c) a structure meant a structure meant predominantly predominantly for use as (i) an educational, (ii) a for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment; clinical, or (iii) an art or cultural establishment;

d)d) canal, dam or other irrigation works; canal, dam or other irrigation works; e)e) pipeline, conduit or plant for (i) water supply (ii) water treatment, or pipeline, conduit or plant for (i) water supply (ii) water treatment, or

(iii) sewerage treatment or disposal; or(iii) sewerage treatment or disposal; orf)f) a residential complex predominantly meant for self-use or the use of a residential complex predominantly meant for self-use or the use of

their employees or other persons specified in the Explanation 1 to their employees or other persons specified in the Explanation 1 to clause 44 of section 65 B of the said Act;clause 44 of section 65 B of the said Act;


authorityauthority► Government (States or Central) or any local authority (such Government (States or Central) or any local authority (such

as municipal corporation, development authority etc) or as municipal corporation, development authority etc) or governmental authority (such as Revenue Board, Water Board governmental authority (such as Revenue Board, Water Board etc) shall be exempt from levy of service tax onetc) shall be exempt from levy of service tax on• construction, construction, • erection,erection,• commissioning, commissioning, • installation, installation, • completion, completion, • fitting out, fitting out, • repair, repair, • maintenance,maintenance,• renovation, orrenovation, or• alteration, alteration, in relation to specified structure, buildingsin relation to specified structure, buildings or complex.or complex.


authorityauthority► Construction of buildings or structures such as hospitals or Construction of buildings or structures such as hospitals or

educational institutes for the government or local authority or educational institutes for the government or local authority or governmental authority –Exemptgovernmental authority –Exempt

► if such construction is for others – Taxableif such construction is for others – Taxable► A civil structure or any other original works meant A civil structure or any other original works meant

predominantly predominantly for use other than for commerce, industry, or for use other than for commerce, industry, or any other business or profession – Exemptany other business or profession – Exempt

► If client is other than the Government, a local authority or a If client is other than the Government, a local authority or a governmental authority, service tax is required to paid governmental authority, service tax is required to paid

► Service tax is payable on construction of a residential complex Service tax is payable on construction of a residential complex having more than one single residential unithaving more than one single residential unit

Services provided by way ofServices provided by way of constructionconstruction, , erection, commissioning, installation, erection, commissioning, installation,

completion, fitting out, repair, maintenance, completion, fitting out, repair, maintenance, renovation, or alteration renovation, or alteration

Services provided by way ofServices provided by way of constructionconstruction, , erection, erection, commissioning, commissioning,

installation, completion, fitting out, repair, maintenance, installation, completion, fitting out, repair, maintenance, renovation, or renovation, or

alteration of,-alteration of,-a)a) a road, bridge, tunnel, or terminal for road transportation a road, bridge, tunnel, or terminal for road transportation

for use by general public; for use by general public; b)b) a civil structure or any other original works pertaining to a civil structure or any other original works pertaining to

a scheme under Jawaharlal Nehru National Urban a scheme under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana;Renewal Mission or Rajiv Awaas Yojana;

c)c) a building owned by an entity registered under section 12 a building owned by an entity registered under section 12 AA of the Income tax Act, 1961(43 of 1961)AA of the Income tax Act, 1961(43 of 1961) and meant and meant predominantly for religious use by general public;predominantly for religious use by general public;

d)d) a pollution control or effluent treatment plant, except a pollution control or effluent treatment plant, except located as a part of a factory; orlocated as a part of a factory; or

e)e) a structure meant for funeral, burial or cremation of a structure meant for funeral, burial or cremation of deceaseddeceased

Services provided by way ofServices provided by way of constructionconstruction, , erection, commissioning, installation, erection, commissioning, installation,

completion, fitting out, repair, maintenance, completion, fitting out, repair, maintenance, renovation, or alteration renovation, or alteration

• Construction of roads for use by general public - ExemptConstruction of roads for use by general public - Exempt• Construction of roads which are not for general public use e.g. Construction of roads which are not for general public use e.g.

construction of roads in a factory, residential complex etc –construction of roads in a factory, residential complex etc –TaxableTaxable

• If assessee is constructing such structures for the If assessee is constructing such structures for the government, a local authority or a governmental authority – government, a local authority or a governmental authority – ExemptExempt

• If assessee is constructing for others – TaxableIf assessee is constructing for others – Taxable• construction of a building owned by an entity registered under construction of a building owned by an entity registered under

section 12 AA of the Income tax Act, 1961 and meant section 12 AA of the Income tax Act, 1961 and meant predominantly for religious use by general public – Exemptpredominantly for religious use by general public – Exempt

• Repair, maintenance of airports, ports and railways -Taxable Repair, maintenance of airports, ports and railways -Taxable

Services by way of construction, erection, Services by way of construction, erection, commissioning, or installation of original commissioning, or installation of original

worksworks Services by way of construction, erection, commissioning, or Services by way of construction, erection, commissioning, or

installation installation of original works pertaining to,-of original works pertaining to,-a)a) an airport, port or railways, including monorail or metro;an airport, port or railways, including monorail or metro;b)b) a single residential unit otherwise than as a part of a a single residential unit otherwise than as a part of a

residential complex;residential complex;c)c) low- cost houses up to a carpet area of 60 square metres per low- cost houses up to a carpet area of 60 square metres per

house in a housing project approved by competent authority house in a housing project approved by competent authority empowered under the ‘Scheme of Affordable Housing in empowered under the ‘Scheme of Affordable Housing in Partnership’ framed by the Ministry of Housing and Urban Partnership’ framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India; Poverty Alleviation, Government of India;

d)d) post- harvest storage infrastructure for agricultural produce post- harvest storage infrastructure for agricultural produce including a cold storages for such purposes; orincluding a cold storages for such purposes; or

e)e) mechanised food grain handling system, machinery or mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food equipment for units processing agricultural produce as food stuff excluding alcoholic beverages;stuff excluding alcoholic beverages;

Services by way of construction, erection, Services by way of construction, erection, commissioning, or installation of original commissioning, or installation of original

worksworks

• ““Original works” as defined in Valuation Rules means – Original works” as defined in Valuation Rules means –

(a) all new constructions; or (a) all new constructions; or

(b) all types of additions and alterations to abandoned or (b) all types of additions and alterations to abandoned or damaged structures on land that are required to make them damaged structures on land that are required to make them workable, workable,

(c) erection, commission or installation of plant, machinery or (c) erection, commission or installation of plant, machinery or equipment or structures, whether prefabricated or otherwise equipment or structures, whether prefabricated or otherwise

• No service tax liability on erection or installation of machineries or No service tax liability on erection or installation of machineries or

equipments for units processing agricultural produce equipments for units processing agricultural produce • Erection or installation of machineries or equipments for dal mills, Erection or installation of machineries or equipments for dal mills,

rice mills, milk dairies or cotton ginning mills -Exempt rice mills, milk dairies or cotton ginning mills -Exempt • Only erection and construction of original works is covered Only erection and construction of original works is covered • Exemption will cover low cost houses under the scheme of Exemption will cover low cost houses under the scheme of

affordable housing in partnership affordable housing in partnership

Temporary transfer or permitting Temporary transfer or permitting the use or enjoyment of a the use or enjoyment of a

copyrightcopyrightTemporary transfer or permitting the use or enjoyment of a Temporary transfer or permitting the use or enjoyment of a

copyright copyright

covered under clauses (a) or (b) of sub-section (1) of section 13 covered under clauses (a) or (b) of sub-section (1) of section 13 of the of the

Indian Copyright Act, 1957 relating to original literary, dramatic, Indian Copyright Act, 1957 relating to original literary, dramatic, musical, musical,

artistic works or cinematograph films;artistic works or cinematograph films;► A music company would be required to pay service tax A music company would be required to pay service tax ► Service Tax is not payable on the royalty amount so received Service Tax is not payable on the royalty amount so received

from the music company by composerfrom the music company by composer► an author having copyright of a book written by him –Exemptan author having copyright of a book written by him –Exempt► copyright of a cinematographic film -Exemptcopyright of a cinematographic film -Exempt

Services by a performing artist in folk Services by a performing artist in folk or classical art formsor classical art forms

Services by a performing artist in folk or classical art forms of (i) music, Services by a performing artist in folk or classical art forms of (i) music, or or

(ii) dance, or (iii) theatre, excluding services provided by such artist as a (ii) dance, or (iii) theatre, excluding services provided by such artist as a brand ambassador;brand ambassador;• The service provided by any person being a performing artist in the The service provided by any person being a performing artist in the

form of -form of -• folk, orfolk, or• classical classical in relation to -in relation to -• music, music, • dance, ordance, or• theatre theatre

are exempt are exempt • if such an artist provides services as a brand ambassador for any if such an artist provides services as a brand ambassador for any

product, service, event or company etc for a consideration - Taxableproduct, service, event or company etc for a consideration - Taxable

Services by way of collecting or Services by way of collecting or providing newsproviding news

Services by way of collecting or providing news by an independent Services by way of collecting or providing news by an independent

journalist, Press Trust of India or United News of India;journalist, Press Trust of India or United News of India;• The exemption will be available to following persons or The exemption will be available to following persons or

service providers – service providers –

(a) independent journalists (individuals, reporters, (a) independent journalists (individuals, reporters, correspondents etc but not editors of newspapers or correspondents etc but not editors of newspapers or electronic media) electronic media)

(b) Press Trust of India (PTI) (b) Press Trust of India (PTI)

(c) United News of India (UNI) (c) United News of India (UNI) • PTI and UNI are government sponsored news agencies – Non PTI and UNI are government sponsored news agencies – Non

TaxableTaxable• News syndication by private news agencies for a News syndication by private news agencies for a

consideration - Taxableconsideration - Taxable

Services by way of renting of a hotel, inn, Services by way of renting of a hotel, inn, guest house, club, campsite or other guest house, club, campsite or other

commercial placescommercial places Services by way of renting of a hotel, inn, guest house, club, campsite Services by way of renting of a hotel, inn, guest house, club, campsite

or or other commercial places meant for residential or lodging purposes, other commercial places meant for residential or lodging purposes,

having having declared tariff of a unit of accommodation below rupees one thousand declared tariff of a unit of accommodation below rupees one thousand

per per day or equivalent day or equivalent

• ““Declared tariff” includes charges for all amenities provided in the Declared tariff” includes charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air-unit of accommodation (given on rent for stay) like furniture, air-conditioner, refrigerators or any other amenities, but does not include conditioner, refrigerators or any other amenities, but does not include any discount offered on the published charges for such unitany discount offered on the published charges for such unit

• Abatement under Notification No. 26/2012-ST is also available to such Abatement under Notification No. 26/2012-ST is also available to such services where declared tariff is Rs. 1000 or more and Service Tax is services where declared tariff is Rs. 1000 or more and Service Tax is payable only on 60 per cent of the gross value of taxable service payable only on 60 per cent of the gross value of taxable service

Serving of food or beverages by a Serving of food or beverages by a

restaurant / eating jointsrestaurant / eating joints Services provided in relation to serving of food or beverages by a Services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, other than those having (i) the facility restaurant, eating joint or a mess, other than those having (i) the facility of air-conditioning or central air-heating in any part of the establishment, of air-conditioning or central air-heating in any part of the establishment, at any time during the year, and (ii) a licence to serve alcoholic at any time during the year, and (ii) a licence to serve alcoholic BeveragesBeverages• It is not necessary that the facility of air-conditioning is available round It is not necessary that the facility of air-conditioning is available round

the year the year • Serving of food or beverages in a centrally air-conditioned premise will Serving of food or beverages in a centrally air-conditioned premise will

be taxed if its restaurant has a license to serve alcoholic beverages be taxed if its restaurant has a license to serve alcoholic beverages • those restaurants which do not have license to serve alcoholic those restaurants which do not have license to serve alcoholic

beverages - Exempt beverages - Exempt • Under N. No. 26/2012-ST dated 20.6.2012, abatement @ 30 per cent is Under N. No. 26/2012-ST dated 20.6.2012, abatement @ 30 per cent is

allowed w.e.f. 1.7.2012 to bundled services by way of supply of food allowed w.e.f. 1.7.2012 to bundled services by way of supply of food or any other article of human consumption or any drink in a premises, or any other article of human consumption or any drink in a premises, including a hotel, convention centre, club etc. subject to condition of including a hotel, convention centre, club etc. subject to condition of non availment of Cenvat Credit on inputs.non availment of Cenvat Credit on inputs.

Services by way of transportation by Services by way of transportation by rail or a vessel from one place in India rail or a vessel from one place in India

to anotherto another Services by way of transportation by rail or a vessel from one place in Services by way of transportation by rail or a vessel from one place in India to another of the following goods -India to another of the following goods -a.a. petroleum and petroleum products falling under Chapter heading petroleum and petroleum products falling under Chapter heading

2710 and 2711 of the First Schedule to the Central Excise Tariff 2710 and 2711 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);Act, 1985 (5 of 1986);

b.b. relief materials meant for victims of natural or man-made relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap;disasters, calamities, accidents or mishap;

c.c. defence or military equipments;defence or military equipments;d.d. postal mail or mail bags; postal mail or mail bags; e.e. household effects;household effects;f.f. newspaper or magazines registered with the Registrar of newspaper or magazines registered with the Registrar of

Newspapers; Newspapers; g.g. railway equipments or materials; railway equipments or materials; h.h. agricultural produce;agricultural produce;i.i. foodstuff including flours, tea, coffee, jaggery, sugar, milk foodstuff including flours, tea, coffee, jaggery, sugar, milk

products, salt and edible oil, excluding alcoholic beverages; or products, salt and edible oil, excluding alcoholic beverages; or j.j. chemical fertilizer and oilcakes; chemical fertilizer and oilcakes;

Services by way of transportation by Services by way of transportation by rail or a vessel from one place in India rail or a vessel from one place in India

to anotherto another

• The exemption is in relation to – The exemption is in relation to –

(a) transportation of specified goods only (a) transportation of specified goods only

(b) in a rail or a vessel.(b) in a rail or a vessel.

(c) from one place to other by rail or vessel (c) from one place to other by rail or vessel

• Goods specified are of general nature, transportation of which Goods specified are of general nature, transportation of which is in national and public interest is in national and public interest

Services provided by a goods Services provided by a goods transport agency for transportation of transport agency for transportation of

goodsgoodsServices provided by a goods transport agency by way of Services provided by a goods transport agency by way of transportation of -transportation of -a)a) fruits, vegetables, eggs, milk, food grains or pulses in a fruits, vegetables, eggs, milk, food grains or pulses in a

goods carriage;goods carriage;b)b) goods where gross amount charged for the transportation of goods where gross amount charged for the transportation of

goods on a consignment transported in a single goods goods on a consignment transported in a single goods carriage does not exceed one thousand five hundred rupees; carriage does not exceed one thousand five hundred rupees; oror

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

Services by way of giving Services by way of giving on hire on hire

Services by way of giving on hire -Services by way of giving on hire -

a)a) to a state transport undertaking, a motor vehicle meant to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers; orto carry more than twelve passengers; or

b)b) to a goods transport agency, a means of transportation to a goods transport agency, a means of transportation of goodsof goods

Exemption shall be available subject to following conditions – Exemption shall be available subject to following conditions – • hiring to a State transport undertaking or to a goods hiring to a State transport undertaking or to a goods

transport agency transport agency • hiring of motor vehicle to carry more than 12 passengers hiring of motor vehicle to carry more than 12 passengers

or in case of GTA, for transportation of goodsor in case of GTA, for transportation of goods• In both the cases, vehicle should be given on hireIn both the cases, vehicle should be given on hire

Transport of passengers with or Transport of passengers with or

without accompanied belongingswithout accompanied belongings Transport of passengers, with or without accompanied belongings, by -Transport of passengers, with or without accompanied belongings, by -

a)a) air, embarking from or terminating in an airport located in the air, embarking from or terminating in an airport located in the state of Arunachal Pradesh, Assam, Manipur, Meghalaya, state of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, or Tripura or at Bagdogra located in Mizoram, Nagaland, Sikkim, or Tripura or at Bagdogra located in West Bengal; West Bengal;

b)b) a contract carriage for the transportation of passengers, a contract carriage for the transportation of passengers, excluding tourism, conducted tour, charter or hire; orexcluding tourism, conducted tour, charter or hire; or

c)c) ropeway, cable car or aerial tramway;ropeway, cable car or aerial tramway;

The ingredients of a contract carriage are - The ingredients of a contract carriage are - It carries passengers for hire or rewardIt carries passengers for hire or reward It is engaged in contract whether expressed or implied for use of It is engaged in contract whether expressed or implied for use of

such vehicle as a whole;such vehicle as a whole; The contract must be entered into by the person with the holder The contract must be entered into by the person with the holder

of permit in relation to such vehicle or with any person of permit in relation to such vehicle or with any person authorized by himauthorized by him

Transport of passengers with or Transport of passengers with or without accompanied belongingswithout accompanied belongings

The agreed consideration can either by on time basis or one The agreed consideration can either by on time basis or one point to another;point to another;

The vehicle should not stop to pick up or set down passengers The vehicle should not stop to pick up or set down passengers not included in the contract anywhere during the journey;not included in the contract anywhere during the journey;

It includes maxi-cab or motor-cab. It includes maxi-cab or motor-cab. • In cases where a bus operates on a route under a In cases where a bus operates on a route under a

contract carriage and passengers embark or disembark contract carriage and passengers embark or disembark from the bus at any place falling on the route and pay from the bus at any place falling on the route and pay separate fares for the whole or for stages of journey, separate fares for the whole or for stages of journey, no Service Tax would be payable. no Service Tax would be payable.

• transport of passenger in a contract carriage for the transport of passenger in a contract carriage for the transportation of passengers for tourism, conducted transportation of passengers for tourism, conducted tour, tour,

charter or hire is taxable charter or hire is taxable

Services by way of vehicle parking to Services by way of vehicle parking to

general publicgeneral public Services by way of vehicle parking to general public excluding leasing Services by way of vehicle parking to general public excluding leasing

of of

space to an entity for providing such parking facilityspace to an entity for providing such parking facility

• Rent of vacant land used for parking is liable to Service Rent of vacant land used for parking is liable to Service Tax Tax

• No Service Tax is payable on providing the facility of No Service Tax is payable on providing the facility of motor vehicle parking to general public motor vehicle parking to general public

• Parking facility provided to any one which is not a general Parking facility provided to any one which is not a general public, say a bank or hotel or car dealer etc –Taxablepublic, say a bank or hotel or car dealer etc –Taxable

• General public defined to mean the body of people at General public defined to mean the body of people at large sufficiently defined by some common quality of large sufficiently defined by some common quality of

pubic or impersonal naturepubic or impersonal nature

Services provided to Government, a Services provided to Government, a local authority or a governmental local authority or a governmental

authorityauthority Services provided to Government, a local authority or a governmental Services provided to Government, a local authority or a governmental

authority by way of -authority by way of -

a)a) carrying out any activity in relation to any function ordinarily carrying out any activity in relation to any function ordinarily entrusted to a municipality in relation to water supply, public health, entrusted to a municipality in relation to water supply, public health, sanitation conservancy, solid waste management or slum sanitation conservancy, solid waste management or slum improvement and upgradation; orimprovement and upgradation; or

b)b) repair or maintenance of a vessel or an aircraftrepair or maintenance of a vessel or an aircraft

Services provided to the Government or a local authority or Services provided to the Government or a local authority or Governmental Governmental

Authority may cover services by way of – Authority may cover services by way of –

((a) repair of a ship, boat or vessel or aircraft a) repair of a ship, boat or vessel or aircraft

(b) effluents and sewerage treatment; (b) effluents and sewerage treatment;

(c) waste collection or disposal; (c) waste collection or disposal;

(d) storage, treatment or testing of water for drinking purposes; or (d) storage, treatment or testing of water for drinking purposes; or

(e) transport of water by pipeline or conduit for drinking purposes; (e) transport of water by pipeline or conduit for drinking purposes;

Services provided to Government, a Services provided to Government, a local authority or a governmental local authority or a governmental

authorityauthority

Activities carried out in relation to functions ordinarily Activities carried out in relation to functions ordinarily

entrusted to municipality in relation to – entrusted to municipality in relation to – water supplywater supply public health public health sanction conservation sanction conservation solid waste management solid waste management slum improvement / upgradation slum improvement / upgradation

Services of general Services of general insurance business insurance business

Services Services of general insurance business provided under of general insurance business provided under following schemes following schemes a.a. Hut Insurance Scheme;Hut Insurance Scheme;b.b. Cattle Insurance under Swarnajaynti Gram Cattle Insurance under Swarnajaynti Gram

Swarozgar Yojna (earlier known as Integrated Rural Swarozgar Yojna (earlier known as Integrated Rural Development Programme);Development Programme);

c.c. Scheme for Insurance of Tribals;Scheme for Insurance of Tribals;d.d. Janata Personal Accident Policy and Gramin Janata Personal Accident Policy and Gramin

Accident Policy; Accident Policy; e.e. Group Personal Accident Policy for Self-Employed Group Personal Accident Policy for Self-Employed

Women;Women;f.f. Agricultural Pumpset and Failed Well Insurance;Agricultural Pumpset and Failed Well Insurance;g.g. premia collected on export credit insurance;premia collected on export credit insurance;

Services of general Services of general insurance business insurance business

h.h. Weather Based Crop Insurance Scheme or the Weather Based Crop Insurance Scheme or the Modified National Agricultural Insurance Scheme, Modified National Agricultural Insurance Scheme, approved by the Government of India and approved by the Government of India and implemented by the Ministry of Agriculture;implemented by the Ministry of Agriculture;

i.i. Jan Arogya Bima Policy;Jan Arogya Bima Policy;j.j. National Agricultural Insurance Scheme (Rashtriya National Agricultural Insurance Scheme (Rashtriya

Krishi Bima Yojana); Krishi Bima Yojana); k.k. Pilot Scheme on Seed Crop Insurance;Pilot Scheme on Seed Crop Insurance;l.l. Central Sector Scheme on Cattle Insurance;Central Sector Scheme on Cattle Insurance;m.m. Universal Health Insurance Scheme;Universal Health Insurance Scheme;n.n. Rashtriya Swasthya Bima Yojana; orRashtriya Swasthya Bima Yojana; oro.o. Coconut Palm Insurance Scheme; Coconut Palm Insurance Scheme;

Services provided by an Services provided by an

incubateeincubatee Services provided by an incubatee up to a total turnover of fifty lakh Services provided by an incubatee up to a total turnover of fifty lakh rupees in a financial year subject to the following conditions, namely:- rupees in a financial year subject to the following conditions, namely:- a)a) the total turnover had not exceeded fifty lakh rupees during the the total turnover had not exceeded fifty lakh rupees during the

preceding financial year; andpreceding financial year; andb)b) a period of three years has not been elapsed from the date of a period of three years has not been elapsed from the date of

entering into an agreement as an incubateeentering into an agreement as an incubatee

Services provided by an incubatee up to a total business Services provided by an incubatee up to a total business turnover of fifty lakh rupees in a financial year subject to turnover of fifty lakh rupees in a financial year subject to conditionsconditions

• the total business turnover had not exceeded fifty the total business turnover had not exceeded fifty lakh rupees during the preceding financial year; and lakh rupees during the preceding financial year; and

• a period of three years has not lapsed from the date a period of three years has not lapsed from the date of entering into an agreement as an incubateeof entering into an agreement as an incubatee

Service by an unincorporated body or Service by an unincorporated body or a non- profit entitya non- profit entity

Service by an unincorporated body or a non- profit entity registered Service by an unincorporated body or a non- profit entity registered under under

any law for the time being in force, to its own members by way of any law for the time being in force, to its own members by way of reimbursement of charges or share of contribution - reimbursement of charges or share of contribution -

a)a) as a trade union;as a trade union;b)b) for the provision of carrying out any activity which is exempt for the provision of carrying out any activity which is exempt

from the levy of service tax; orfrom the levy of service tax; orc)c) up to an amount of five thousand rupees per month per up to an amount of five thousand rupees per month per

member for sourcing of goods or services from a third person member for sourcing of goods or services from a third person for the common use of its members in a housing society or a for the common use of its members in a housing society or a residential complexresidential complex

• Services should be provided to own members and not to non- Services should be provided to own members and not to non- members. members.

• Service of an unincorporated body or a non- profit entity Service of an unincorporated body or a non- profit entity registered under any law for the time being in force to its own registered under any law for the time being in force to its own members up to an amount of Rs 5,000 per member per month by members up to an amount of Rs 5,000 per member per month by way of reimbursement of charges or share of contribution is way of reimbursement of charges or share of contribution is exempt from service tax exempt from service tax

Services provided by Services provided by IntermediariesIntermediaries

Services by the following persons in respective capacities -Services by the following persons in respective capacities -a)a) sub-broker or an authorised person to a stock broker; sub-broker or an authorised person to a stock broker; b)b) authorised person to a member of a commodity exchange;authorised person to a member of a commodity exchange;c)c) mutual fund agent to a mutual fund or asset management mutual fund agent to a mutual fund or asset management

company;company;d)d) distributor to a mutual fund or asset management company;distributor to a mutual fund or asset management company;e)e) selling or marketing agent of lottery tickets to a distributer or selling or marketing agent of lottery tickets to a distributer or

a selling agent; a selling agent; f)f) selling agent or a distributer of SIM cards or recharge coupon selling agent or a distributer of SIM cards or recharge coupon

vouchers; vouchers; g)g) business facilitator or a business correspondent to a banking business facilitator or a business correspondent to a banking

company or an insurance company, in a rural area; orcompany or an insurance company, in a rural area; orh)h) sub-contractor providing services by way of works contract to sub-contractor providing services by way of works contract to

another contractor providing works contract services which another contractor providing works contract services which are exempt;are exempt;

Services by an organizer to any person in Services by an organizer to any person in respect of a business exhibition held outside respect of a business exhibition held outside

IndiaIndia

Services by an organizer to any person in respect of a business Services by an organizer to any person in respect of a business exhibition exhibition

held outside India held outside India

► Organizer should be in IndiaOrganizer should be in India► Exhibition should be held outside IndiaExhibition should be held outside India► It should be in relation to businessIt should be in relation to business

Services by way of making telephone Services by way of making telephone

callscalls

Services by way of making telephone calls from -Services by way of making telephone calls from -

a)a) departmentally run public telephone; departmentally run public telephone;

b)b) guaranteed public telephone operating only for local calls; guaranteed public telephone operating only for local calls; oror

c)c) free telephone at airport and hospital where no bills are free telephone at airport and hospital where no bills are being issued being issued

Services by way of slaughtering of Services by way of slaughtering of

bovine animalsbovine animals

Services by way of slaughtering of bovine Services by way of slaughtering of bovine animalsanimals

Services received from a provider of Services received from a provider of service located in a non- taxable service located in a non- taxable

territoryterritory Services received from a provider of service located in a non- Services received from a provider of service located in a non-

taxable taxable territory by -territory by -a)a) Government, a local authority, a governmental authority or Government, a local authority, a governmental authority or

an individual in relation to any purpose other than an individual in relation to any purpose other than commerce, industry or any other business or profession; commerce, industry or any other business or profession;

b)b) an entity registered under section 12AA of the Income tax an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961) for the purposes of providing Act, 1961 (43 of 1961) for the purposes of providing charitable activities; orcharitable activities; or

c)c) a person located in a non-taxable territorya person located in a non-taxable territory• If services are used for industry, business or commercial If services are used for industry, business or commercial

purpose, service \tax is payable under reverse charge basispurpose, service \tax is payable under reverse charge basis • Other purposes, it will be exempt from service taxOther purposes, it will be exempt from service tax

Services of Public LibrariesServices of Public Libraries

Services of public libraries by way of lending of books, Services of public libraries by way of lending of books, publications or any publications or any

other knowledge- enhancing content or materialother knowledge- enhancing content or material

Following services of public libraries shall be exempt –Following services of public libraries shall be exempt –► lending of books lending of books ► lending of publications lending of publications ► lending of other knowledge enhancing content or lending of other knowledge enhancing content or

material, (i.e. in soft or hard version, digital material, (i.e. in soft or hard version, digital content, web content etc) content, web content etc)

• ‘‘Public library’ has not been defined Public library’ has not been defined

Services by Employees’ State Insurance Services by Employees’ State Insurance Corporation to persons governed under the Corporation to persons governed under the

Employees Insurance Act, 1948Employees Insurance Act, 1948 Services by Employees’ State Insurance Corporation to persons Services by Employees’ State Insurance Corporation to persons

governed governed

under the Employees’ Insurance Act, 1948 (34 of 1948)under the Employees’ Insurance Act, 1948 (34 of 1948)

► Covers the services provided by the Employee’s State Covers the services provided by the Employee’s State Insurance Corporation (ESIC) constituted under the Employees Insurance Corporation (ESIC) constituted under the Employees State Insurance Act, 1948 State Insurance Act, 1948

► in relation to employee’s sickness, maternity and employment in relation to employee’s sickness, maternity and employment injury and promotion of measures for health etc of insured injury and promotion of measures for health etc of insured persons persons

Services by way of transfer of a Services by way of transfer of a going concerngoing concern

Services by way of transfer of a going concern, as a whole or an Services by way of transfer of a going concern, as a whole or an

independent part thereof independent part thereof

► Going Concern as per AS-1Going Concern as per AS-1► Sale of business as a wholeSale of business as a whole► Related services are taxableRelated services are taxable

Services by a governmental authority by way of any Services by a governmental authority by way of any activity in relation to any function entrusted to a activity in relation to any function entrusted to a

municipalitymunicipality Services by a governmental authority by way of any activity in Services by a governmental authority by way of any activity in

relation to relation to

any function entrusted to a municipality under article 243 W of any function entrusted to a municipality under article 243 W of the the

ConstitutionConstitution

► All services are not exempt All services are not exempt ► Services by a governmental authority by way of any activity in Services by a governmental authority by way of any activity in

relation to any function entrusted to a municipality under relation to any function entrusted to a municipality under article 243W of the article 243W of the

Constitution are exempt Constitution are exempt

a knowledge workshop-presentation ii dated 14th july,2012

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