CHAPTER
V OF THE FINANCE ACT, 1994
(as amended)
Service Tax
Page7
65A. Classification of taxable services
-
(1)
For the purposes of this chapter classification of taxable services
shall be determined according to terms of sub-clauses of clause
(105) of section 65;
(2)
when for any reason, a taxable service is, prima facie, classifiable
under two or more sub-clauses or clause (105) of section (65),
classification shall be affected as follows :-
(a)
the sub-clause which provides the most specific description shall
be preferred to sub-clauses providing a more general description;
(b)
composite services consisting of a combination of different services
which can not be classified in the manner specified in clause
(a) shall be classified as if it consisted in the service which
gives them their essential character;
(c)
when a service can not be classified in the manner specified in
clause (a) or clause (b), it shall be classified under sub-clause
which occurs first among the sub-clauses which equally merit consideration;
There shall be levied a tax (hereinafter
referred to as the service tax) at the rate of ten per cent of
the value of the taxable services with in sub-clauses (a) to (z)
and (za) to (zz) and clause (zza) to (zzzh)of clause (105) of
section 65 and collected in such manner as may be prescribed;
67. Valuation
of taxable services for charging service tax.–For
the purposes of this Chapter, the value of any taxable service
shall be the gross amount charged by the service provider of such
service provided or to be provided by him.
Explanation. 1. – for the removal of doubts, it is hereby
declared that the value of a taxable service, as the case may
be, includes, --
(a) the aggregate of commission or brokerage charged by a broker
on the sale of purchase of securities including the commission
or brokerage paid by the stock broker to any sub-broker;
(b) the adjustments made by the telegraph authority from any
deposits made by the subscriber at the time of application for
telephone connection or pager or facsimile or telegraphic or
telex or for leased circuit;
(c) the amount of premium charged by the insurer from the policy
holder;
(d) the commission received by the air travel agent from the
airline;
(e) the commission, fee or any other sum received by an actuary,
or intermediary or insurance intermediary or insurance agent
from the insurer;
(f) the reimbursement received by the authorised service station
from manufacturer for carrying out any service of any motor
car, maxi-cab or two wheeled motor vehicle manufactured by such
manufacturer, and
(g) the commission or any amount received by the rail travel
agent from the Railways or the customer,
but does not include, -
(i) initial deposit made by the subscriber at the time of application
for telephone connection or pager or facsimile or telegraph
or telex or leased circuit
(ii) the cost of unexposed photography films, unrecorded magnetic
tape or such other storage devices if any, sold to the client
during the course of providing service;
(iii) the cost of parts or accessories, if any, sold to the
customer during the course of service or repair of motor cars
or two wheeled motor vehicles;
(iv) the airfare collected by air travel agent in respect of
service provided by him; and
(v) the rail fare collected by rail travel agent in respect
of service provided by him.
(vi) the cost of parts or other material, if any, sold to the
customer during the course of providing maintenance or repair
service; and
(vii) the cost of parts or other material, if any, sold to the
customer during the course of providing commissioning or installation.
Explanation 2.- Where the gross amount charged by a service
provider is inclusive of service tax payable, the value of taxable
service shall be the amount as with the addition of tax payable,
is equal to the gross amount charged.
Explanation 3.—For the removal of doubts, it is hereby
declared that the gross amount charged for the taxable service
shall include any amount received towards the taxable service
before, during or after provision of such service.
68. Payment of service tax. –
(1) Every person providing taxable
service to any person shall pay service tax at the rate specified
in section 66 in such manner and within such period as may be
prescribed.
(2) Notwithstanding anything contained in sub-section (1), in
respect of any taxable service notified by the Central Govt. in
the Official Gazette, the service tax thereon shall paid by such
person and in such manner as may be prescribed at the rate specified
in section 66 and all the provisions of this chapter shall apply
to such person as if he is the person liable for paying the service
tax in relation to such service.
