Indirect Taxes

Service Tax - Statute Update

Rajkamal Shah
CA.

1. Private safe deposit lockers service providers

The Directorate General of Service Tax vide Letter F.No. V/DGST/21(9)/B&FS/01/2007 dated 3-1-2008 has issued instruction to the field formations, to provide the details of the private service providers of safe deposits vaults operating in their jurisdiction and whether any service tax paid by them which they are liable to pay under Banking and Other Financial Services as defined u/s. 65(105) (zm).

2. Service tax on international travel by international airlines

The CBEC vide Letter F.No. 4/Com(ST)/2008 dated 7-1-2008 has observed that some of the airlines engaged in international travel of passengers by premium class (other than economic class) may not be paying service tax on international travel by the passengers embarking from India. It has advised the field formations to take necessary action, on priority basis to ensure timely recovery of service tax from such airlines under their jurisdiction.

3. Service tax on maintenance or repairs of road

The DGST in reply to the Chief Minister of Madhya Pradesh, seeking exemption from levy of service tax on maintenance or repair of roads has stated that maintenance or repairs of roads is covered under Management, Maintenance or Repair Service.

Vide Letter F.No. V/DGST/30-MISC-16/2008 dated 31-1-2008 the DGST has issued instruction to the field formations to ensure that service tax is collected from the service providers undertaking management, maintenance or repairs of roads and rendering service to Public Works Department or to any other department of the State or Central Government.

The DGST clarification refers to Letter F. No. 356/53/2007-TRU dated 14-12-2007 on the subject matter.

4. Readers please take note – Errata from January 2007 issue :

Para II of the Update erroneously convey that the clarification given by Circular No. 137/56/2007-CX.4 dated 16-11-2007 give hint that the law firms are liable to tax under ‘Business Support Service’. However, the statement is not correct as it happened due to juxtaposition of the circulars. The error is regretted.