Erection, Commissioning or installation

  Statutory coverage

- Erection, commissioning or installation of plant, machinery, equipment or structures, whether prefabricated or otherwise

-  Installation of- (a) electrical and electronic devices, including wirings or fittings therefor; or (b) plumbing, drain laying or other installations for transport of fluids; or (c) heating, ventilation or air-conditioning including related pipe work, ductwork and sheet metal work; or (d) thermal insulation, sound insulation, fire proofing or water proofing; or (e) lift and escalator, fire escape staircases or travelators; or (f) such other similar services [section 65(39a)]

  Case Law/Board Circulars

Supply of lift and its installation at site. It was held that it is a contract of 'sale' and not a 'works contract'. Skill and labour employed for converting the main components into lift was only incidental - State of Andhra Pradesh v. Kone Elevators (India) Ltd. 2005 (181) ELT 156 (SC 3 member bench).

Service tax payable even if excise duty paid on entire value of contract including erection charges - Lincoln Helios (India) Ltd. v. CCE (2006) 3 STT 311 (CESTAT).

  Exclusions

Erection of Civil Structure not taxable

  Valuation

  Exemptions

-   See para 12.3 for general        exemptions

Event management

  Statutory coverage

Service provided in relation to planning, promotion, organising or presentation of any arts, entertainment, business, sports, marriage or any other event

  Exclusions

  Exemptions

- See para 12.3 for general exemptions

Fashion designing

  Statutory coverage

Any activity relating to conceptualizing, outlining, creating the designs and preparing patterns for costumes, apparels, garments, clothing accessories, jewellery or any other article intended to be worn by human beings .

Any other service incidental thereto [section 65(43)]

  Exclusions

- If fashion designer designs and makes garments himself and sells them, there is no service tax, as he is providing designing service to himself. - - Services of tailor and jewellers are not taxable, as no designing is involved. - - - CBE&C circular No. B.11/1/2002-TRU dated 1-8-2002

  Exemptions

-   See para 12.3 for general    exemptions

Forward contract

  Statutory coverage

-  Service by a member of a recognized association or a registered association, in relation to a forward contract.

-  "Forward contract" means the contract for delivery of goods at future date and which is not for ready delivery contract .

See Para 12.3 for general exemptions

Franchise

  Statutory coverage

- "Franchise" means an agreement by which the franchisee is granted representational right to sell or manufacture goods or to provide service or undertake any process identified with franchisor, whether or not a trademark, service mark, trade name or logo or any such symbol, as the case may be, is involved [section 65(47)]

Case Law/Board Circulars

-  Some well known examples of franchise are - Coca-Cola, Pepsi, NIIT, Aptech, McDonald   etc.

      - If vocational training is provided through           franchisee, the service will be taxable           under 'franchisee service' - Jetking          Information Ltd. v. CCE (2007) 6 STT          444 (CESTAT)

See para 12.3 for general exemptions

General insurance

  Statutory coverage

- Services by an insurer, including re-insurer, in relation to general insurance business.

  Case Law/Board Circulars

-   No service tax if assets are in J&K - - DGST instruction No. V/DGST/03/GEN/INS/01/2004 dated 17-8-2004

-  Certain schemes like personal accident social security scheme, crop insurance, cattle insurance, janata policy, export credit insurance, insurance on export of goods from India are exempt - Notification No. 3/1994-ST dated 30-6-1994.

-  Jana Arogya Bima policy is exempt from service tax - Notification No. 12/1997-ST dated 14-2-1997.

- Group personal accident policy for self employed women is exempt under notification No. 3/1994-ST dated 30-6-1994. Scheme of Rajasthan Government is exempt under notification No. 1/2000-ST dated 9-2-2000.

-  (a) Cattle insurance services are exempt. - Notification No. 4/2000-ST dated 31-7-2000 (b) National Agricultural Insurance Scheme, Seed Crop Insurance, Farm Income Insurance Scheme are exempt from service tax - Notification No. 3/2000-ST dated 6-7-2000 (c) Insurance of sheep is exempt upto 31-12-2009 - Notification No. 31/2006-ST dated 11-12-2006.

-  General Insurance Business service provided under Universal Health Insurance Scheme is exempt from service tax - Notification No. 16/2003-ST dated 11-7-2003.

-  See para 12.3 for general exemptions

Health and fitness

  Statutory coverage

-       Service for physical well being such as, sauna and steam bath, turkish bath, solarium, spas, reducing or slimming saloons, gymnasium, yoga, meditation, massage ( excluding therapeutic massage) or any other like service [section 65(51)]

- See para 12.3 for general exemptions

Insurance Auxiliary (General insurance)

  Statutory coverage

- Service to a policy holder or any person or insurer, including re-insurer, by an actuary, or intermediary or insurance intermediary or insurance agent, in relation to insurance auxiliary services concerning general insurance business.

- Risk assessment, claim settlement, survey and loss assessment [section 65(55)]

Reverse charge - Person liable to pay service tax

- In respect of services provided by an insurance agent, the insurance company is the 'person liable for paying the service tax'. [section 68(2) of Finance Act, 1994 read with rule 2(1)(d)(iii) of Service Tax Rules, 1994]. The service tax is payable on commission payable to the insurance agent. However, the exemption available to small service providers cannot be availed by insurance agent.  

See para 12.3 for general exemptions

Insurance Auxiliary (Relating to life insurance)

  Statutory coverage

- Service to a policy holder or any person or insurer, including re-insurer, by an actuary, or intermediary or insurance intermediary or insurance agent, in relation to insurance auxiliary services concerning life insurance business.

- Risk assessment, claim settlement, survey and loss assessment [section 65(55)]

Reverse charge - Person liable to pay service tax

In respect of services provided by an insurance agent, the insurance company is the 'person liable for paying the service tax'. [section 68(2) of Finance Act, 1994 read with rule 2(1)(d)(iii) of Service Tax Rules, 1994]. The service tax is payable on commission payable to the insurance agent. However, the exemption available to small service providers cannot be availed by insurance agent  

- See para 12.3 for general exemptions

Intellectual property

  Statutory coverage

Transferring temporarily; or permitting the use or enjoyment of, any intellectual property right is taxable [section 65(55b)]

  "intellectual property right" means any right to intangible property, namely, trademarks, designs, patents or any other similar intangible property, under any law for the time being in force, but does not include copyright [section 65(55a)]

  Exclusions - 
Copyright service is excluded.

Permanent transfer of Intellectual Property not taxable

  Exemptions

Interior decorator

  Statutory coverage

Planning, design or beautification of spaces, whether manmade or otherwise, in any manner

•  Advice, consultancy, technical assistance or in any other manner, services relating to planning, design or beautification of spaces

•  Landscape designer [section 65(59)]

- See para 12.3 for general exemptions

Internet cafe

  Statutory coverage

- Facility for accessing internet

- See para 12.3 for general exemptions

Internet telephony service

  Statutory coverage

- Telecommunication service through internet and includes fax, audio conferencing and video conferencing [section 65(57a)]

- See para 12.3 for general exemptions

Life insurance

  Statutory coverage

- Service in relation to risk cover in life insurance.

  Case Law/Board Circulars

- Service tax is payable on gross amount charged in respect of risk portion of insurance premium.

  Valuation
As per rule 6(7A), the insurance company will have option to pay tax at flat rate of 1% of the gross premium without showing any break-up. If policy is purely risk coverage, then service tax will be at full rate on the gross premium.

  Exemptions

- See para 12.3 for general exemptions

Mailing list compilation and mailing

  Statutory coverage

- Service in relation to- (i) compiling and providing list of name, address and any other information from any source; or (ii) sending document, information, goods or any other material in a packet, by whatever name called, by addressing, stuffing, sealing, metering or mailing; for, or on behalf of the client [section 65(63a)]

- See para 12.3 for general exemptions

Management, Maintenance or repair

  Statutory coverage

- Any service provided by- (i) any person under a contract or an agreement; or (ii) a manufacturer or any person authorised by him, - - in relation to, - (a) management of properties, whether immovable or not (b) maintenance or repair of properties whether immovable or not; or (c) maintenance or repair including reconditioning or restoration, or servicing of any goods or equipment, excluding motor vehicle

-  "Goods" includes computer software [section 65(64)]

  Case Law/Board Circulars

-         Services relating to maintenance or management of immovable property (such as roads, airports, railways, buildings, parks, electrical installations and the like) have been covered under the purview of service tax - para 16.2 of MF(DR) circular No. B1/6/2005-TRU dated 27-7-2005

- Services provided during the warranty period by the dealer or any other authorized person is taxable - CBE&C circular No. 59/8/2003 dated 20-6-2003.

-  Software maintenance is taxable.

-  AMC contracts taxable

  Exclusions -
Services to motor vehicles not taxable under this head [section 65(64)]

  Exemptions

-    See para 12.3 for general exemptions

Management or Business Consultant

  Statutory coverage

-  Service in connection with the management of any organization or business in any manner 

-  Advice, consultancy or technical assistance, in relation to financial management, human resources management, marketing management, production management, logistics management, procurement and management of information technology resources or other similar areas of management [section 65(65)]

  Exclusions -
Executory services would not fall under 'consultancy services' - Glaxo Smithkline Pharmaceuticals v. CCE (2005) 1 STT 37 (CESTAT) - quoted with approval in Glaxo Smithkline Consumer Healthcare v. CCE (2007) 9 STT 496 (CESTAT).

  Exemptions

- See para 12.3 for general exemptions

Mandap keeper

  Statutory coverage

- "mandap" means any immovable property and includes any furniture, fixtures, light fittings and floor coverings therein let out for consideration for organising any official, social or business function [section 65(66)]

-  Social function includes marriage [section 65(67)]

-  Service provided as a caterer are included [section 65(105)(m)]

  Case Law/Board Circulars

-         Services of hotel or restaurant will be taxable if it provides 'mandap' services. - view confirmed in Rajmalal Hotel v. CCE (2007) 6 STT 11 (CESTAT).

In Social Service League v. CCE (2006) 4 STT 283 (CESTAT), it has been held that drama performances conducted in a hall or mandap will not come under mandap keeper services. In a contrary view, in ADA Rangamandira Trust v. CCE (2007) 8 STT 206 (CESTAT), it was held that drama, music and dance should be held as social functions.

-  If the mandap keeper provides catering services also and if his bill indicates that his bill is inclusive of charges for catering services, he has to pay service tax only on 60% of his gross charges to client. Catering service means supply of food - Notification No. 1/2006-ST dated 1-3-2006.

-  Use of precincts of a religious place as mandap is exempted from service tax - notification No. 14/2003-ST dated 20-6-2003,

-  See para 12.3 for general exemptions

Manpower recruitment or supply agency

  Statutory coverage

-  Recruitment or supply of manpower, temporarily or otherwise, in any manner

-  Services in relation to pre-recruitment screening, verification of the credentials and antecedents of the candidate and authenticity of documents submitted by the candidate.

  Case Law/Board Circulars

-  Academic/educational institutes providing recruitment services are taxable - Ref Code 010.01/23.8.07 of CBE&C Circular No. 96/7/2007-ST dated 23-8-2007.

-  Services of labour contractors are taxable w.e.f. 16-6-2005

-  Service of providing employees of Agency to business or industrial organizations for a specific period is taxable - Ref Code 010.02/23.8.07 of CBE&C Circular No. 96/7/2007-ST dated 23-8-2007.

  Valuation

Service tax is to be charged on the full amount of consideration for the supply of manpower, whether full-time or part-time. The value includes recovery of staff costs from the recipient e.g. salary and other contributions. Even if the arrangement does not involve the recipient paying these staff costs to the supplier (because the salary is paid directly to the individual or the contributions are paid to the respective authority) these amounts are still part of the consideration and hence form part of the gross amount - per MF(DR) circular No. B1/6/2005-TRU dated 27-7-2005 para 22.4 (It is difficult to agree with this view. However, if the principal employer is in a position to avail Cenvat credit, it may be advisable to pay service tax on entire amount, instead of entering into fruitless and costly litigation).

Market research agency

  Statutory coverage

- Market research in any manner, in relation to any product, service or utility, including all types of customised and syndicated research services [section 65(69)]

- See para 12.3 for general exemptions

Mining of mineral, oil or gas services

  Statutory coverage

- Service in relation to mining of mineral, oil or gas .

- See para 12.3 for general exemptions

On-line information and data base access or retrieval (Computer network)

  Statutory coverage

-  On-line information and database access or retrieval or both in electronic form through computer network

-  Providing data or information, retrievable or otherwise, to a customer, in electronic form through a computer network [section 65(75)]

  Case Law/Board Circulars

-  Following would be covered - (a) Internet Service Providers (ISP) (b) On line information provision and retrieval services like paid websites. However, e-commerce transactions are not covered as they do not charge surfers. - CBE&C letter No. B.II/I/2000-TRU dated 9-7-2001.

-  Providing matrimonial services on website is taxable - prima facie view in Bharat Matrimony.com Pvt. Ltd. v . CST (2007) 6 STT 85 (CESTAT)  

- See para 12.3 for general exemptions

Opinion poll

  Statutory coverage

- Service designed to secure information on public opinion regarding social, economic, political or other issues [section 65(75a)]

See para 12.3 for general exemptions

Outdoor Caterer

  Statutory coverage

- Services in connection with catering at a place other than his own, but including a place provided by way of tenancy or otherwise by the person receiving such services [section 65(76a)]

-  "Caterer" means any person who supplies, either directly or indirectly, any food, edible preparations, alcoholic or non-alcoholic beverages or crockery and similar articles or accoutrements for any purpose or occasion [section 65(24)]

  Case Law/Board Circulars

-  In case of canteen in office or factory run by canteen contractor, if the service is received by the employer, it will be taxable. If the service is directly provided to employees/workmen, then the canteen should not come within the definition.

  Valuation

- The outdoor caterer can opt to pay service tax on 50% of his Bill amount. He can avail this concession if following conditions are satisfied - (a) The Bill or challan issued indicates that it is inclusive of charges for supply of food (Food means a substantial and satisfying meal, only snacks are not sufficient) (b) He does not take Cenvat credit of duty/service tax paid on inputs, input services and capital goods and (c) He does not avail benefit of notification No. 12/2003-ST dated 20-6-2003 - Notification No. 1/2006-ST dated 1-3-2006.

- See para 12.3 for general exemptions

Packaging Activity

  Statutory coverage

- Packaging of goods including pouch filling, bottling, labelling or imprinting of the package [section 65(76b)]

  Case Law/Board Circulars

- The intention seems to be to cover specialized packaging services like packing for transport etc. If packaging results in manufacture of new Article, excise duty will become payable.

- See para 12.3 for general exemptions

Pandal or Shamiana

  Statutory coverage

-  Service by a pandal or shamiana contractor

-  'Pandal or shamiana' means a place spe­cially prepared or arranged for organizing an official, social or business function. social function includes marriage [section 65(77a)]

-  Preparation, arrangement, erection or decoration of a pandal or shamiana

-  Supply of furniture, fix­tures, lights and lighting fittings, floor coverings and other articles for use in pandal or shamiana [section 65(77b)]

  Valuation
If a pandal or shamiana contractor provides catering services of full meals, tax will be payable only on 70% of the gross amount charged to client - Notification No. 1/2006-ST dated 1-3-2006

See para 12.3 for general exemptions

Photography

  Statutory coverage

-  "Photography" includes still photography, motion picture photography, laser photography, aerial photography or fluorescent photography [section 65(78)]

  Case Law/Board Circulars

- In Live Tone v. State of Tripura (2001) 122 STC 115 (Gau HC), it was held that works contract tax (Vat) can be levied on the value of goods transferred (i.e. negative and printing paper) but not on whole price which includes charge of artistic skill required in developing photograph - same view in Classic Colour Lab v. DCCT (1998) 110 STC 269 (Kar HC) * Bavens v. UOI (1995) 97 STC 161 (Ker HC DB)

  Exclusions

- X-ray or CT scan will not be covered as in common parlance they are not photography studios or agencies. - CBE&C letter No. B.II/I/2000-TRU dated 9-7-2001.

  Valuation

- In Laxmi Colour v. CCE (2005) 2 STT 220 = 3 STR 363 (CESTAT), it was held that no deduction of material cost is allowable. It was also held that in service like photography, there is no element of sale of goods. Thus, tax is payable on entire amount.

Port and other port

  Statutory coverage

-   Service by a port or any person authorized by the port in relation to port services

  Case Law/Board Circulars

  In Homa Engg Works v. CCE (2005) 2 STT 157 (CESTAT), it was held that only port services authorised by Board of Trustees of port under section 42(4) of Major Port Trust Act where rates are specified by Board by notification, are taxable - same view in Western (I) Shipyard Ltd. v. CCE (2007) 8 STT 338 (CESTAT) * Homa Engg Works v. CCE (2007) 9 STT 294 (CESTAT).

- See para 12.3 for general exemptions

Practising CA/CWA/CS Services

  Statutory coverage

- Service by a Practising Chartered Accountant/Cost Accountant/Company Secretary in his professional capacity

-  Services provided by practising CA/CWA/CS in his professional capacity to a client, relating to representing before any statutory authority in the course of proceedings initiated under any law for the time being in force, by way of issue of notice, are exempt from service tax. All other services provided by practising CA/CWA/CS in his professional capacity are taxable (Notification No. 25/2006-ST dated 13-7-2006).

-  See para 12.3 for general exemptions

Programme Production (of TV or Radio programmes)

  Statutory coverage

  Service by a programme producer, in relation to a pro­gramme.

- "Programme" means any audio or visual matter, live or recorded, which is intended to be disseminated by transmission of electro-magnetic waves through space or through cables intended to be received by the general public either directly or indirectly through the medium of relay stations [section 65(86a)]

- See para 12.3 for general exemptions

Public relations management service

  Statutory coverage

- Service in relation to managing the public relations of another person

- "Public relations" includes strategic counselling based on industry, media and perception research, corporate image management, media relations, media training, press release, press conference, financial public relations, brand support, brand launch, retail support and promotions, events and communications and crisis communications [section 65(86c)]

- See para 12.3 for general exemptions

Rail travel agent

  Statutory coverage

- Service in relation to booking of passage for travel by rail

- See para 12.3 for general exemptions

Real estate agent

  Statutory coverage

 - Advice, consultancy or technical assistance, in relation to evaluation, conception, design, development, construction, implementation, supervision, maintenance, marketing, acquisition or management, of real estate [section 65(89)]

-  Service in relation to sale, purchase, leasing or renting, of real estate.

-  Services of Real estate consultant [section 65(88)]

- See para 12.3 for general exemptions

Recovery Agent

  Statutory coverage

- Service in relation to recovery of any sums due to banking company or financial institution, including a non-banking financial company, or any other body corporate or a firm.

- See para 12.3 for general exemptions

Registrar to an issue

  Statutory coverage

- Activities in relation to an issue including collecting application forms from investors, keeping a record of applications and money received from investors or paid to the seller of securities, assisting in determining the basis of allotment of securities, finalising the list of persons entitled to allotment of securities and processing and despatching allotment letters, refund orders or certificates and other related documents [section 65(89c)]

-  "Issue" means an offer of sale or purchase of securities to, or from, the public or the holder of securities [section 65(59a)]

- See para 12.3 for general exemptions

Rent-a-Cab operator

  Statutory coverage

- Service in relation to the renting of a cab

-  "cab" means - (i) a motorcab, or (ii) a maxicab, or (iii) any motor vehicle constructed or adapted to carry more than twelve passengers, excluding the driver, for hire or reward [section 65(20)]

  Case Law/Board Circulars

- If a driver is provided with cab, it is still rent-a-cab service - Shiva Travels v. CCE (2006) 7 STT 75 (CESTAT).

  Ambulances are not meant for carrying passengers for hire or reward. Hence, service tax liability does not arise - para 7.2.1 of D.O. F. No. 334/1/2007-TRU dated 28-2-2007.

Service tax is payable only on 40% of the gross amount charged by the operator for providing taxable service, if the Rent-a-cab operator does not avail Cenvat of duty/tax paid on inputs, input services and capital goods and he does not avail benefit of notification No. 12/2003-ST dated 20-6-2003 - Notification No. 1/2006-ST dated 1-3-2006.

See para 12.3 for general exemptions

Renting of immovable property

  Statutory coverage

-  Renting of immovable property for use in the course or furtherance of business or commerce.

-  "Immovable property" includes - (i) building and part of a building, and the land appurtenant thereto (ii) land incidental to the use of such building or part of a building (iii) the common or shared areas and facilities relating thereto; and (iv) in case of a building located in a complex or an industrial estate, all common areas and facilities relating thereto, within such complex or estate.

-  "Renting of immovable property" includes renting, letting, leasing, licensing or other similar arrangements of immovable property for use in the course or furtherance of business or commerce [section 65(90a)]

-  Use of immovable property as factories, office buildings, warehouses, theatres, exhibition halls and multiple-use buildings is covered [Explanation to section 65(90a)]  

  Exemptions