service tax
vijay dhiman
(Querist) 13 October 2010
This query is : Resolved
sir,
pls define business auxiliuary service in service tax act.
wht foreign commission paid on rice export should be taxable in the same service under service tax act
Madhava Law Office
(Expert) 13 October 2010
Dear Vijay Dhiman,
Section 65 (19) defines the phrase "Business Auxiliary Service" as follows:
65(19) “business auxiliary service” means any service in relation to, —
(i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or
(ii) promotion or marketing of service provided by the client; or
(iii) any customer care service provided on behalf of the client; or
(iv) procurement of goods or services, which are inputs for the client; or
[Explanation. — For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, “inputs” means all goods or services intended for use by the client;]
v) production or processing of goods for, or on behalf of, the client;]
(vi) provision of service on behalf of the client; or
(vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision,
and includes services as a commission agent, [but does not include any activity that amounts to manufacture of excisable goods].
[Explanation. — For the removal of doubts, it is hereby declared that for the purposes of this clause, —
(a) ”commission agent” means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person who, while acting on behalf of another person —
(i) deals with goods or services or documents of title to such goods or services; or
(ii) collects payment of sale price of such goods or services; or
(iii) guarantees for collection or payment for such goods or services; or
(iv) undertakes any activities relating to such sale or purchase of such goods or services;
Further, in respect of liability of ST on foreign commission paid on export of rice would depend on the terms of service agreement between the parties. Prima Facie, no ST would be payable on such commission since generally such types of services are provided and consumed outside India.
aman kumar
(Expert) 13 October 2010
business auxiliuary service in service tax act.b) “Business Auxiliary service” means any service in relation to -
i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or
ii) promotion or marketing of service provided by the client; or
iii) any customer care service provided on behalf of the client; or
iv) any incidental or auxiliary support service such as billing, collection or recovery of accounts and remittance evaluation of prospective and public relation services, and includes services as a commission agent, but does not include any information technogloy service. Explanation: For the removal of doubts, it is hereby declared that for the purposes of this clause “Information technology service” means any service in relation to designing, development or maintaining of computer software, or computerized data processing or system networking, or any other service primarily in relation to operation of computer system. In the Budget proposal for the year 2004-05 following further additions are proposed in the definition of “Business Auxiliary Service”. iv) procurement of goods or services, which are inputs for the client; or
v) production of goods on behalf of the client; or
vi) provision of service on behalf of the client; or
Further the earlier entry no.(iv) is proposed to be amended as under and renumbered as (vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision. and includes services as a commission agent, but does not includes any information technology service and any activity that amounts to “manufacture” within the meaning of clause (f) of section 2 of the Central Excise Act, 1944.
pawan sharma
(Expert) 14 October 2010
I agree with the experts.
