servicetax edu
TRANSCRIPT
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K. Vaitheeswaran & Co.
ADVOCATES & TAX CONSULTANTS
Flat No.3, First Floor,
No.9, Thanikachalam Road,T. Nagar,Chennai - 600 017.
402, Front Wing,
House of Lords,15/16, St. Marks Road,Bangalore 560 001
Mobile: 98400-96876 E-mail : [email protected]
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No separate Service Tax Act. Still governedby Finance Act, 1994 and Rules made there
under.Law has grown too fast with frequentchanges.
No longer an assessee friendly legislation.
Multiple wings in action.
DGCEI, Intelligence, Audit and Assessment.
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410.61
846.16
1022.01
1515.9
1787.09
2071.83
2611.68
3305.44
4124.89
7889.97
14196.19
23053
37596.88
50603
64460
0
10000
20000
30000
40000
50000
60000
70000
1994-95 1995-96 1996-97 1997-98 1998-99 1999-
2000
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-
08(R)
2008-
09(B)
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Fastest growing tax
Phenomenal collections
Adjudication process
Revision
Judicial precedentsCollection targets Vs. Fair Adjudication
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COMMERCIAL TRAINING OR
COACHINGCommercial training or coaching centre means anyinstitute or establishment providing
for
the sports, with or without issuanceof a certificate and includes coaching or tutorialclasses pre-school coaching
and training centre any institute or establishmentwhich issues any certificate or diploma or degree any educational qualification recognized by Law forthe time being in force.
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COMMERCIAL TRAINING OR
COACHINGThe Central Board of Excise and Customs videCircular No.84 / 2 / 2006-ST dated19.09.2006 has clarified as under:The definition of charity and charitable as defined inBlacks Law Dictionary may be kept in mind. Charityis defined as aid given to the poor, the suffering orthe general community for religious, ,
economic, public safety, or medical purposes, andcharitable as dedicated to a general public purpose,usually for the benefit of needy people who cannot
pay for the benefits received.
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COMMERCIAL TRAINING OR
COACHINGThe Board vide Circular dated 01.11.2006 in thecontext of service tax on IITs and IIMs with referenceto campus interview fees has clarified in para 4 as
under:A commercial concern is an institution or establishment that is
. It is not one / few isolatedactivities which determine whether or not an institution is acommercial concern. It is the totality of its activity and theobjective of its existence that determines the commercial natureof an institution as an entity or concern. The principle activitiesof the institute like IIT or IIM is to impart education without theobjective of making profit.
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COMMERCIAL TRAINING OR
COACHINGThe Kerala High Court in the case of
has held that the levy of service taxon parallel colleges is arbitrary and violativeof Article 14 of the Constitution of India and
the Government is prohibited from demandingservice tax.
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COMMERCIAL TRAINING OR
COACHINGThe Kerala High Court in the case of
has held that an educational institutionconducting any course which is a requirementto write examination to obtain degree or
certificate awarded by any agency created byLaw is not liable to service tax.
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RECOGNIZED BY LAW?
It does not limit the recognition only to institutes inIndia.
The objective of the exclusion in the definition is to
exclude school, graduate and post-graduate teachinginstitutes and establishments from service tax.
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NON-PROFIT ORGANIZATIONThe Bangalore Tribunal in the case of
has grantedabsolute stay and waiver of pre-deposit sincethe Appellant is a registered as a society andfunctioning as non-profit organisation and theactivity of training provided to candidates
selected by Central and State Governmentswill not attract service tax under the categoryof Commercial Training or Coaching Centre.
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CHARITABLE TRUSTIn the case of
the Appellant was a
charitable trust registered under Section 12AA of theIncome Tax Act 1961, imparting post graduateprogrammes in Management, which were notrecognized under any law for the time being in forceand was collecting course fees towards imparting such
Management programmes.
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CHARITABLE TRUSTThe Income Tax exemption is granted by the Director ofIncome Tax (Exemption) and the income is exempt fromincome tax under Section 11.
Section 11 provides for an exemption in respect of incomederived from property held under Trust for charitable orreligious purposes.
In terms of Section 2(15) of the Income Tax Act, charitablepurpose includes relief of the poor, education, medical relief andthe advancement of any other general public utility.(Impact of
amendment by Finance Act 2008)educational institutions created under trust qualify for incometax registration only when the Income Tax Authorities aresatisfied that the trust has been formed for charitable purposesfor the purpose of recognition and exemption under Income TaxLaw.
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VOCATIONAL TRAININGNotification No.24/2004 exempts vocationaltraining.
Vocational training institute means acommercial training or coaching centre, whichprovides vocational training or coaching thatimparts skills to enable the trainee to seek
employment or undertake self-employmentdirectly after such training or coaching.
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WHAT IS VOCATIONAL?When the exemption was originally introduced in 2003the Board vide Circular dated 20.06.2003 had clarifiedas under:
.
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WHAT IS VOCATIONAL?The Kerala High Court in the case of
has held
that anything in which a person is engagedsystematically can be an occupation orvocation. This decision has been affirmed inappeal in 156 ITR 412 by the Supreme Court.
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RECREATIONALNotification No.24/2004 exempts RecreationalTraining Institutes.
Recreational training institute means acommercial training or coaching relating torecreational activities such as dance, singing,martial arts or hobbies.
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RECREATIONALThe Tribunal in the case of
has held that
teaching mental arithmetic using abacus aplastic instrument is fun and relaxation andprima facie in the nature of recreationalactivity.
Pre-deposit waived in the case of.
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SPECIFIC EXCLUSIONThe Tribunal in the case of
has held thatonline computer courses is covered under commercial
training and coaching.Notification No.24/2004 provides that the Notificationshall not apply in respect of services provided by acomputer training institute.
Computer training institute means a commercialtraining or coaching centre which provides coaching ortraining relating to computer software or hardware.
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CONCLUSIONEducation should not be taxed
Government should not see Goddess
Lakshmi through Goddess Saraswathi.
Service tax at 12.36% is a prohibitivecost ultimately borne by the society
without cenvat credit.
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Thank you
Advocates & Tax Consultants
Mobile: 98400-96876
E-mail : [email protected]
Flat No.3, First Floor,No.9, Thanikachalam Road,
T. Nagar,
Chennai - 600 017.
402, Front Wing,House of Lords,
15/16, St. Marks Road,
Bangalore 560 001