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Reference Code
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Issue
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Clarification
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(1)
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(2)
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(3)
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002.01 / 23.08.07
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Whether service
tax is liable on the amount collected as surcharge for delayed payment
of telephone bills?
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An amount
collected for delayed payment of a telephone bill is not to be treated
as consideration charged for provision of telecom service and,
therefore, does not form part of the value of taxable service under
section 67 read with Service Tax (Determination of Value) Rules, 2006.
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004.01 / 23.08.07
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Persons / agencies
canvass advertisements for publishing, on commission basis. Such persons
/ agencies do not provide any other services like making, preparation,
display or exhibition of advertisement.
Whether merely
canvassing advertisement for publishing on a commission basis by persons
/ agencies is classifiable as Advertising Agency service [section
65(105)(e)] or not?
|
Merely canvassing
advertisements for publishing, on commission basis, is not classifiable
under the taxable service falling under section 65(105)(e).
Such services are
liable to service tax under business auxiliary service [section 65(105)(zzb)]. |
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005.01 / 23.08.07
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Some transporters
undertake door- to-door transportation of goods or articles and they
have made special arrangements for speedy transportation and timely
delivery of such goods or articles. Such services are known as ‘Express
Cargo Service’ with assurance of timely delivery.
Whether such
‘Express cargo service’ is covered under courier agency service [section
65(105)(f)]?
|
The nature of
service provided by ‘Express Cargo Service’ provider falls within the
scope and definition of the courier agency. Hence, the said service is
liable to service tax under courier agency service [section 65(105)(f)]. |
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005.02 / 23.08.07
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“Angadia”
undertakes delivery of documents, goods or articles received from a
customer to another person for a consideration.
Whether services
provided by angadia is liable to service tax under courier agency
service [section 65(105)(f)]?
|
Angadias are
covered within the definition of ‘courier agency’ [section 65(33)].
Therefore, such services provided by angadia is liable to service tax
under courier agency service [section 65(105)(f)]. |
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006.01 / 23.08.07
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Whether a
self-employed professionally qualified engineer can be considered as
‘consulting engineer’ [section 65(31)] and service provided by such
self-employed professionally qualified engineer to a client in relation
to one or more discipline of engineering is liable to service tax under
consulting engineer service [section 65(105)(g)]?
|
Consulting
engineers include self-employed professionally qualified engineer,
whether or not employing others for assistance.
Services provided
by such self-employed professionally qualified engineer to a client in
relation to one or more discipline of engineering is liable to service
tax under consulting engineer service [section 65(105)(g)].
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010.01 / 23.08.07
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Educational
institutes such as IITs, IIMs charge a fee from prospective employers
like corporate houses / MNCs, who come to the institutes for recruiting
candidates through campus interviews. Whether services provided by such
institutions in relation to recruitment of manpower are liable to
service tax under ‘manpower recruitment or supply agency’ service
[section 65(105)(k)]? |
‘Manpower recruitment or supply agency’ is defined as “any person
engaged in providing any service, directly or indirectly, in any manner
for recruitment or supply of manpower, temporarily or otherwise, to a
client” [section65(68)].
Educational institutes such as IITs and IIMs fall within the definition
of ‘manpower recruitment or supply agency’, and service tax is liable on
services provided by such institutions in relation to campus recruitment
under section 65(105)(k).
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010.02 / 23.08.07
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Business or
industrial organisations engage services of manpower recruitment or
supply agencies for temporary supply of manpower which is engaged for a
specified period or for completion of particular projects or tasks.
Whether service
tax is liable on such services under manpower recruitment or supply
agency’s service [section 65(105)(k)] |
In the case of
supply of manpower, individuals are contractually employed by the
manpower recruitment or supply agency. The agency agrees for use of the
services of an individual, employed by him, to another person for a
consideration. Employer-employee relationship in such case exists
between the agency and the individual and not between the individual and
the person who uses the services of the individual.
Such cases are
covered within the scope of the definition of the taxable service
[section 65(105)(k)] and, since they act as supply agency, they fall
within the definition of “manpower recruitment or supply agency”
[section 65(68)] and are liable to service tax.
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012.01 / 23.08.07
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“Mandap” is
defined as any immovable property as defined in section 3 of the
Transfer of Property Act, 1882 and includes any furniture, fixtures,
light fittings and floor coverings therein let out for a consideration
for organizing any official, social or business function. [section
65(66)]
“Mandap keeper” is
defined as a person who allows temporary occupation of a mandap for a
consideration for organising any official, social or business function
[section 65(67)].
Whether hotels /
restaurants letting out their halls, rooms etc. for social, official or
business functions fall within the definition of “mandap” and allowing
temporary occupation of halls, rooms etc by such hotels / restaurants
for organizing any official, social or business function is liable to
service tax under “mandap keeper service” [section 65(105)(m)]?
|
Halls, rooms etc.
let out by hotels / restaurants for a consideration for organising
social, official or business functions are covered within the scope of
“mandap” [section 65(66)], and such hotels and restaurants are covered
within the scope of “mandap keeper” [section 65(67)].
Accordingly,
service tax is leviable on services provided by hotels and restaurants
in relation to letting out of halls, rooms, etc. for organizing any
official, social or business function under mandap keeper service
[section 65(105)(m)]. |
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012.02 / 23.08.07
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Whether allowing
temporary occupation of a hall for the purpose of holding dance, drama
or music programme or competitions is liable to service tax under Mandap
Keeper Service? |
Dance, drama or
music programme or competitions are social functions and allowing
temporary occupation of a hall for a consideration for organizing such
functions are liable to service tax under Mandap Keeper Service [section
65(105)(m)].
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032.01 /
23.08.07 |
Whether Prasar
Bharati Corporation (Doordarshan and All India Radio) are liable to pay
service tax under Broadcasting Service [section 65(105) (zk)]? |
Prior to 1.3.2003,
Prasar Bharati Corporation did not pay service tax by virtue of
erstwhile section 22 of the Prasar Bharati (Broadcasting Corporation of
India) Act, 1990. However, the said section 22 was omitted vide section
163 of the Finance Act, 2002 with effect from 1.4.2003.
In view of the
above statutory changes, with effect from 1.4.2003 Prasar Bharati
Corporation is liable to pay service tax for the broadcasting services
provided like any other broadcasting agency or organization engaged in
providing service in relation to broadcasting.
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034.01 / 23.08.07
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Moneychangers are
persons authorized under section 7 of Foreign Exchange Management Act,
1973 to deal in foreign currency. Explanation given under Section 7 of
the said Act states that ‘dealing’ means purchasing foreign currency in
the form of notes, coins or traveller’s cheques or selling foreign
currency in the form of notes, coins or traveller’s cheques.
Whether services
provided by a money changer in relation to dealing of foreign currency
(buying or selling), at specified rates, without separately charging any
amount as commission for such dealing, is liable to service tax as
foreign exchange broking under ‘banking and other financial services’
[section 65(105) (zm)]?
|
Moneychangers are
authorized by RBI to buy and sell foreign exchange at the prevalent
market rates. Buying or selling of foreign exchange by such persons
without separately charging any amount as commission or brokerage does
not fall within the scope of foreign exchange broking and is not liable
to service tax under section 65(105)(zm). |
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034.02 / 23.08.07
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‘Asset management
and all other forms of fund management’ are liable to service tax under
‘banking and other financial service’ [section 65(12)].
Whether the amount
charged as ‘entry and exit load’ from the investor by a mutual fund is
liable to service tax as asset / fund management services under banking
and other financial services [section 65(105)(zm)]? |
Entry load and
exit load charged by a mutual fund are not for the purpose of management
of assets. Thus, amount charged as “entry and exit load” are not to be
treated as consideration received by an Asset Management Company for
asset management and hence not liable to service tax under Banking and
other Financial service [section 65(105)(zm)]. |
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034.03 / 23.08.07
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Whether depository
services and Electronic Access to Securities Information (EASI) services
provided by Central Depository Services (India) Ltd., (CDSL) is liable
to service tax under Banking and other Financial Services[section
65(105)(zm)]? |
Definition of
“Banking and other Financial Services” specifically includes “provision
and transfer of information and data processing [section 65(12)(a)(vii)]”.
Services provided by CDSL falls within the scope of “provision and
transfer of information and data processing”. These services are not
in the nature of “on-line information and data base access or retrieval
services”. Therefore, the depository services provided by CDSL
including Electronic Access to Securities Information (EASI) for a fee
are liable to service tax under Banking and other Financial Services.
[section 65(105)(zm)]
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034.04 /
23.08.07 |
Services provided
by banking company or a financial institution including a non-banking
financial company or any other body corporate or commercial concern in
relation to asset management including portfolio management, and all
forms of fund management, is leviable to service tax under “banking and
other financial services” [section 65(105)(zm) and section 65(12)]. The
said taxable service also includes cash management services provided.
Services are
provided in relation to chit funds. Chit Funds are of two types,
namely:-
(a)
Simple Chit Funds: In this case, members agree to contribute to the
fund a certain amount at regular interval. Lots are drawn periodically
and the member, whose name appears, gets the periodical collection. No
separate amount is charged from the members.
(b)
Business Chit Funds: In this case, there is a promoter known as
foreman who draws up the terms and conditions of the scheme and enrolls
subscribers. Every subscriber has to pay his subscription in regular
installments. The foreman charges a separate amount for the services
provided. Some States prescribe a ceiling limit for the amount to be
charged by such promoter for the services provided. Commission amount is
retained by the promoter as consideration for providing the services in
relation to chit fund.
Whether services
provided in relation to chit fund is leviable to service tax under
“banking and other financial services” or not?
|
Reserve Bank of
India has clarified that the business of a chit fund is to mobilize cash
from the subscribers and effectively cause movement of such cash to keep
it working and, therefore, the activity of chit funds is in the nature
of cash management.
(a) In the case of
Simple Chit Funds, no consideration is paid or received for the services
provided and, therefore, the question of levy of service tax does not
arise.
(b) In the case of
Business Chit Funds, cash management service is provided for a
consideration and, therefore, leviable to service tax under “banking
and other financial services”.
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035.02 / 23.08.07
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Management
Committee of Paradeep Port was constituted as per the directions of
Supreme Court of India. The Committee operates under the “Paradeep
Port, Clearing, Forwarding and Handling Workers (Regulation of
Employment) Scheme, 1994”. Officers of the Paradeep Port Trust are
associated with the Committee. The Committee is authorized by the Port
Trust to provide a number of services within the port area for a
consideration.
Whether services
provided by the Management Committee within the port area for a
consideration is liable to service tax under Port Service?
|
As the Management
Committee of Paradeep Port is authorized by the Port Trust to provide
services within the port area at the prescribed rates, such services
provided by the Committee are liable to service tax under Port Service.
[section 65(105) (zn)] |
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036.01 / 23.08.07
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Authorized dealers
of motor vehicles provide to customers free servicing of motor vehicles
without charging any amount as service charge from the customers. The
vehicle manufacturer promises such a facility to attract customers and
reimburses the service charges to the authorised dealers, who provide to
customers free servicing of motor vehicles. However, as per agreement,
consideration for the service provider is not directly paid by the
customer but by the vehicle manufacturer.
Whether such ‘free
services’ given to the customer free of cost by the authorized dealers
(for which they are reimbursed by the vehicle manufacturers) are liable
to service tax under authorised service station service [section 65(105)
(zo)]?
|
In this case,
service is provided by an authorised service station to a customer and
the service provider receives the consideration for the services
provided from the manufacturer.
Service tax is
liable on the amount received from the vehicle manufacturer for the
purpose of servicing of vehicles. |
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036.02 / 23.08.07
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Whether servicing
/ repair of heavy vehicles like trucks by authorized service station is
liable to service tax under section 65(105)(zo)? |
Service tax is
liable on services provided by an authorised service station to a
customer in relation to service, repair, reconditioning or restoration
of motorcars, light motor vehicles or two-wheeled motor vehicles
[section 65(105)(zo)].
Thus, servicing of
heavy vehicles like trucks, not being one of the specified categories of
motor vehicles, is at present not covered within the scope of the said
taxable service.
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036.03 / 23.08.07
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Whether spare
parts sold by a service station during the servicing of vehicles is
liable to payment of service tax?
Whether exemption
can be claimed on the cost of consumables that get consumed during the
course of providing service? |
Service tax is not
leviable on a transaction treated as sale of goods and subjected to levy
of sales tax / VAT. Whether a given transaction between the service
station and the customer is a sale or not, is to be determined taking
into account the real nature and material facts of the transaction.
Payment of VAT / sales tax on a transaction indicates that the said
transaction is treated as sale of goods.
Any goods used in
the course of providing service are to be treated as inputs used for
providing the service and accordingly, cost of such inputs form integral
part of the value of the taxable service.
Where spare parts
are used by a service station for servicing of vehicles, service tax
should be levied on the entire bill, including the value of the spare
parts, raised by the service provider, namely, service stations.
However, the service provider is entitled to take input credit of excise
duty paid on such parts or any goods used in providing the service
wherein value of such goods has been included in the bill. The service
provider is also entitled to take input credit of service tax paid on
any taxable services used as input services for servicing of vehicles.
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041.01 / 23.08.07
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Organizers of
Trade Fairs and Exhibitions solicit participation from the trade and
industry and provide space and other facilities, including furniture,
cabins, security, electricity, etc., to display products and provision
of services.
Whether services
provided by the organizers of trade fairs / exhibitions are covered
within the scope of event management service [section 65(015)(zu)]?
|
Trade fairs and
exhibitions are organised by persons. Such organisers of trade fairs and
exhibitions provide services to exhibitors in relation to business
exhibition. Services provided by an organizer of trade fairs and
exhibitions to an exhibitor in relation to business exhibition is liable
to service tax under “Business Exhibition Service” [Section 65(105)(zzo)]
w.e.f. 10.09.2004.
In addition, an
organiser of the trade fair or business exhibition may engage an event
manager to provide service to the organiser in relation to organising
trade fairs and exhibitions. In such cases, the event manager renders
the service of “Event Management” to the organisers and is liable to pay
service tax under “Event Management Service”.
The two services,
namely “Business Exhibition Service” and “Event Management Service”, and
the two service providers of the respective services are distinct.
|
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047.01 / 23.08.07
|
Whether services
provided in relation to handling / storage and warehousing of empty
containers is liable to service tax under storage and warehousing
service [section 65(105)(zza)]? |
Empty containers
are covered within the meaning of “goods” [section 65(50)]. Thus,
services provided in relation to storage and warehousing of empty
containers is liable to service tax under storage and warehousing
service [section 65(105)(zza)].
|
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048.01 / 23.08.07
|
Whether commission
received by distributors for distribution of mutual fund units is liable
to Service Tax under business auxiliary service? |
Distributors
receive commission from mutual fund for providing services relating to
purchase and sale of Mutual fund units. Services provided by such
distributors are in the nature of commission agent and are, thus, liable
to service tax under business auxiliary service [section 65(105)(zzb)].
|
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053.01 /
23.08.07
|
Services provided
by any person to a customer in relation to management, maintenance or
repair is liable to service tax [section 65(105)(zzg)]. “Management,
maintenance or repair” includes maintenance or repair of any goods,
excluding motor vehicle [section 65(64)].
Whether
maintenance or repair of software is liable to service tax?
|
Explanation to
section 65(64) provides that “goods” includes computer software.
Since, maintenance
or repair of any goods is liable to service tax, services provided in
relation to maintenance or repair or servicing of computer software is
liable to service tax under “management, maintenance or repair” service
[section 65(105)(zzg)].
|
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076.01 / 23.08.07
|
“Club or
association” is defined as any person or body of persons providing
services, facilities or advantages, for a subscription or any other
amount, to its members, but does not include such person or body of
persons engaged in any activity having objectives which are of a
charitable nature.
Whether a club or
association enjoying exemption under the provisions of Income Tax Act as
a public charitable institution gets automatically excluded from levy of
service tax under section 65(105)(zzze) read with section 65(25a) of the
Finance Act, 1994? |
Exemption under
the Income Tax Act on the ground of being a public charitable
institution is of no consequence or relevance for service tax purposes.
Levy of service
tax is entirely governed by the provisions contained in the Finance Act,
1994 and the rules made thereunder.
“Charity” is
defined as “aid given to the poor, the suffering or the general
community for religious, educational, economic, public safety, or
medical purposes”, and “charitable” is defined as “dedicated to a
general public purpose, usually for the benefit of needy people who
cannot pay for the benefits received” [Black’s Law Dictionary].
Whether a club or
association is engaged in activity having objectives which are of a
charitable nature or not is to be determined purely on the basis of the
facts and circumstances of the case.
|
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076.02 /
23.08.07
|
Services provided
by a resident welfare association to its members under club or
association service [section 65(105) (zzze)] is exempted from service
tax vide notification No.8/2007-Service Tax, dated 01.03.07, subject to
the condition that the total consideration received from an individual
member by the said association for providing the said services does not
exceed three thousand rupees per month.
Whether a resident
welfare association registered as a co-operative society with the
Registrar of Co-operative Societies is entitled for the benefit of
service tax exemption under notification No.8/2007-Service Tax, dated
01.03.2007 or not? |
A resident welfare
association, even if it is registered as a co-operative society with the
Registrar of Co-operative Societies, is eligible to avail of exemption
from levy of service tax vide notification No.8/2007-Service Tax, dated
01.03.2007 provided the following conditions are satisfied, namely:-
(i) The
exemption is available for the services specified under section
65(105)(zzze) of the Finance Act, 1994 and provided or to be provided by
the association to its members.
(ii) The
sole criterion for membership of the resident welfare association is the
residential status of a person in a residential complex or locality
i.e., membership of the association is restricted to the residents of
the complex or locality.
(iii) The
value of total consideration received from an individual member by the
association for providing the services does not exceed Rs.3,000/- per
month.
|
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079.01 /
23.08.07
|
Whether service
tax is liable under construction of complex service [section 65(105)(zzzh)]
on builder, promoter, developer or any such person,-
(a) who gets the
complex built by engaging the services of a separate contractor, and
(b) who builds the
residential complex on his own by employing direct labour? |
(a) In a case
where the builder, promoter, developer or any such person builds a
residential complex, having more than 12 residential units, by engaging
a contractor for construction of the said residential complex, the
contractor in his capacity as a taxable service provider (to the builder
/ promoter / developer / any such person) shall be liable to pay service
tax on the gross amount charged for the construction services under
‘construction of complex’ service [section 65(105)(zzzh)].
(b) If no other
person is engaged for construction work and the builder / promoter /
developer / any such person undertakes construction work on his own
without engaging the services of any other person, then in such cases,-
(i) service
provider and service recipient relationship does not exist,
(ii) services
provided are in the nature of self-supply of services.
Hence, in the
absence of service provider and service recipient relationship and the
services provided are in the nature of self-supply of services, the
question of providing taxable service to any person by any other person
does not arise.
|
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086.01 / 23.08.07
|
An international
journey commencing from an Indian airport involves stopover / transfer
at intermediate airports outside India before reaching the destination
(say Mumbai-Dubai-London-New York).
Whether service
tax would be liable in such case on the value indicated in the ticket
for the entire journey or only on that part of the value attributable to
the first sector (Mumbai-Dubai) of the journey? |
Aim of the
passenger is to travel from Mumbai to New York. Actual destination of
the international journey is the criterion to decide the value of the
service (in this case, New York). Stopover / transfer at intermediate
airports, being merely incidental and part of the main journey, is of no
relevance or consequence for levy of service tax under section
65(105)(zzzo) read with section 66.
Service tax in
such cases is leviable on the total consideration of a single composite
service relating to the entire journey. i.e., value indicated on the
ticket for the entire journey.
|
|
086.02 / 23.08.07
|
An international
journey (say Delhi-Mumbai-London) includes travel in a domestic sector
(Delhi – Mumbai) as part of the international journey.
Whether service
tax is liable on the value of whole journey or after excluding the value
attributable to the domestic sector from the total value of the ticket? |
In this case, the
journey is a single composite journey. The aim of the passenger is to
travel from India to a place outside India. Part of the travel in the
domestic sector cannot be segregated from the single journey. Service
tax is, therefore, leviable on the total value of the ticket treating
the domestic sector as integral part of the international journey
without excluding the value attributable, if any, to travel in the
domestic sector.
|
|
086.03 / 23.08.07
|
An international
journey commences from an airport outside India and completed at an
airport outside India but including a sector wherein the passenger
disembarks and subsequently embarks at an Indian airport as part of
international journey (say Sydney-Mumbai-Dubai-Singapore-Sydney).
Whether service
tax is liable for Mumbai-Dubai sector only or on the total value of the
ticket?
|
In this case, the
journey being a single one and the aim of the passenger is not to travel
from India to a place outside India, service tax is not leviable under
section 65(105)(zzzo). |
|
086.04 / 23.08.07
|
Whether ticket
issued outside India for an international journey commencing from India
(say Delhi–London) is liable to service tax? |
Service tax is
payable by the service provider, namely aircraft operator, for the
taxable service provided. Place of purchase/ issue of ticket is of no
relevance or consequence to determine the levy of service tax under
section 65(105)(zzzo) read with section 66. Service tax is leviable as
long as the passenger embarks in India for an international journey, in
any class other than economy class.
|
|
086.05 / 23.08.07
|
Whether service
tax is liable on the total value of the ticket or only half the value of
the ticket in the case of round trip / return ticket (say
Delhi-London-Delhi)?
|
Service tax is
leviable on the total value of the ticket. |
|
097.01 / 23.08.07
|
Whether CENVAT
credit of duty paid on capital goods and service tax paid on input
services can be taken by a service provider who opts to pay an amount
equivalent to two per cent. of the gross amount charged for the works
contract instead of paying service tax at the rate specified in section
66, under the Works Contract (Composition Scheme for Payment of Service
Tax) Rules, 2007, notified vide notification No.32/2007-Service Tax
dated 22.05.07?
|
Rule 3(2) of the
Works Contract (Composition Scheme for Payment of Service Tax) Rules,
2007 provides that the provider of taxable service opting to pay service
tax under the composition scheme is not entitled to take CENVAT credit
of duty on inputs, used in or in relation to the said works contract,
under the provisions of the CENVAT Credit Rules, 2004.
There is no
restriction under notification No.32/2007-Service Tax dated 22.05.07 to
take CENVAT credit of duty paid on capital goods and service tax paid on
input services.
|
|
999.01 / 23.08.07
|
Sovereign/public
authorities perform functions assigned to them under the law in force,
known as “statutory functions”. For example,
· Regional
Reference Standards Laboratories (RRSL) undertake verification, approval
and calibration of weighing and measuring instruments;
· Regional
Transport Officers (RTO) issue fitness certificate to motor vehicles;
·
Directorate of Boilers inspects and issues certificates for boilers; or
· Explosive
Department inspects and issues certificate for petroleum storage tank,
LPG/CNG tank in terms of provisions of the relevant laws.
Authorities
providing such functions, required to be performed as per law, may
collect specific amount or fee and the amount so collected is deposited
into government account.
Whether such
activities of a sovereign / public authority, performed under a statute,
can be considered as ‘provision of service’ for the purpose of levy of
service tax and the amount or fee collected, if any, for such purposes
can be treated as consideration for the services provided? |
Activities
assigned to and performed by the sovereign / public authorities under
the provisions of any law are statutory duties. The fee or amount
collected as per the provisions of the relevant statute for performing
such functions is in the nature of a compulsory levy and are deposited
into the Government account.
Such activities
are purely in public interest and are undertaken as mandatory and
statutory functions. These are not to be treated as services provided
for a consideration. Therefore, such activities assigned to and
performed by a sovereign / public authority under the provisions of any
law, do not constitute taxable services. Any amount / fee collected in
such cases are not to be treated as consideration for the purpose of
levy of service tax.
However, if a
sovereign / public authority provides a service, which is not in the
nature of statutory activity and the same is undertaken for a
consideration (not a statutory fee), then in such cases, service tax
would be leviable as long as the activity undertaken falls within the
scope of a taxable service as defined.
|
|
999.02 / 23.08.07
|
Department of
Posts provides a number of services. What is the status of those
services for the purpose of levy of service tax? |
(i) Following
services provided by Department of Posts are not liable to service tax.
· Basic
mail services known as postal services such as post card, inland letter,
book post, registered post provided exclusively by the Department of
Posts to meet the universal postal obligations.
· Transfer
of money through money orders, operation of savings accounts, issue of
postal orders, pension payments and other such services.
(ii) In addition
to the services mentioned in (i) above, Department of Posts also
provides a number of services such as courier services (Speed Post),
insurance services (Postal Life Insurance), agency or intermediary
services on commission basis (distribution of mutual funds, bonds,
passport applications, collection of telephone and electricity bills),
which are also provided by other commercial organizations. Such services
are liable to service tax under appropriate taxable services.
|
|
999.03 /
23.08.07
|
A taxable service
provider outsources a part of the work by engaging another service
provider, generally known as sub-contractor. Service tax is paid by the
service provider for the total work. In such cases, whether service tax
is liable to be paid by the service provider known as sub-contractor who
undertakes only part of the whole work.
|
A sub-contractor
is essentially a taxable service provider. The fact that services
provided by such sub-contractors are used by the main service provider
for completion of his work does not in any way alter the fact of
provision of taxable service by the sub-contractor.
Services provided
by sub-contractors are in the nature of input services. Service tax is,
therefore, leviable on any taxable services provided, whether or not the
services are provided by a person in his capacity as a sub-contractor
and whether or not such services are used as input services. The fact
that a given taxable service is intended for use as an input service by
another service provider does not alter the taxability of the service
provided. |
