Now, the “Express cargo service” - that is a transporter who undertakes door-to-door delivery of goods - comes under the category of “courier agency”.
*Your telephone bill is subject to service tax but the fine collected for delayed payment of the bill is not.
*No service tax is levied on the entry load and the exit load charged by mutual funds from investors.
*IIMs, IITs and other educational institutes are required to pay service tax for their campus recruitments (they charge visiting companies on which they pay the tax), just like any other recruitment agency.
These and many other technical and procedural issues related to service tax have been sought to be clarified in two consolidated draft circulars brought out by the Central Board of Excise and Customs (CBEC) on Tuesday.
CBEC has sought comments from the public on these circulars before notifying them.
According to these draft circulars, the threshold exemption limit for payment of service tax is Rs 8 lakh per annum.
But if a service provider approaches a turnover of Rs 7 lakh in service charges that he receives in a financial year, he is required to get himself registered and then seek an exemption from payment of service tax.
The circulars say merely canvassing advertisement for publishing on a commission basis does not attract service tax under the classification “advertising agency”.
But before such service providers can jump in joy, they need to consider the next clarification that such services come under “business auxiliary service” and are liable to be taxed as such.
Now, the “Express cargo service” - that is a transporter who undertakes door-to-door delivery of goods - comes under the category of “courier agency” and, therefore, cannot escape the tax.
Hotels and restaurants letting out halls and rooms for social, official or business functions are covered under the definition of “mandap keeper service” and are liable to pay tax. Similarly, allowing temporary occupation of a hall for holding cultural programmes is also a taxable service.
However, moneychangers, buying or selling foreign exchange at specified rates without separately charging any amount as commission, do not fall within the scope of “banking and other financial services” and as such, not liable to service tax.
Depository services, on the other hand, are not in the nature of “on-line information and data base access or retrieval services”.
But the depository services provided by Central Depository Services (India) Ltd, including electronic access to securities information (EASI), for a fee are leviable to service tax under “banking and other financial services”.
Car dealers may provide free maintenance service to customers, but in case they do so for a consideration from the vehicle manufacturer, that amount would be charged to service tax.
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