SERVICE TAX TRADE NOTICE NO. 03/2001
Dt.01.03.2001
Sub.:
Service Tax - Levy of Service Tax on certain
Vide clause 130 of the Finance Bill, 2001, Service Tax is proposed to be
levied on the services mentioned below. The
levy will come into force from a date to be notified by the Central Government
under clause 130, after the Finance Bill receives the assent of the President.
The relevant portions of the Finance Bill, governing the proposed
definitions of various terms in connection with introduction of the new levies
is given below: (The definitions
already in force are not reproduced).
1.
Scientific or Technical consultancy.
2.
Photography.
3.
Holding of convention.
4.
Leasing of circuits by telegraph authority.
5.
Communication through telegraph.
6.
Communication through telex.
7.
Facsimile communiucation (Fax)
8.
Online informaion and database access and retrieval.
9.
Video tape production.
10.
Sound recording.
11.
Broadcasting.
12.
Insurance auxiliary services.
13.
Banking an d other Financial servies.
14.
Port services.
15.
Service or repairing of automobiles.
SECTION 65 OF
THE FINANCE ACT 1994.
In this chapter, unless the context otherwise
requires, -
(1) "actuary" has the meaning assigned to
it in clause (1) of section 2 of the Insurance Act, 1938.
(8) "authorised service station" means any
service station, or centre, authorised by any automobile manufacturer
to carry out any service or repair of any automobile manufactured by such
manufacturer.
(9) "banking" and "banking
company" shall have the meaning assigned to them in clauses (b) and (c) of
Section 5 of the Banking Regulation Act, 1949, respectively.
(10) "banking and other financial services"
means, the following services provided by a banking company or a financial
institution including a non-banking financial company, namely-
i)
financial leasing services including equipment leasing and hire purchase
by a body corporate;
ii)
credit card services;
iii)
merchant banking services;
iv)
securities and foreign
exchange(forex) broking;
v)
asset management including portfolio management, all forms of fund
management, custodial depository and trust services, but does not include cash
management;
vi)
advisory and other auxiliary financial services including investment and
portfilio reasearch and advice , advice on mergers and acquisitions and advice
on corporate restructuring and strategy; and
vii)
provision and transfer of information and data processing.
(12)
"body corporate", shall have the meaning assigned to it in
clause (7)of section 2 of the Companies Act, 1956;
(13)
"broadcasting" has the meaning assigned to it in
clause (c) of section 2 of the Prasar Bharati (Broadcasting Corporation
of India) Act,1990
(17)
"computer network" has the meaning assigned to it in clause (j)
of sub-section (1) of Section 2 of the Information Technology Act,2000;
(19)
"convention' means a formal meeting of assembly which is not open to
the general public and does not include a meeting or assembly the principal of
which is to provide any type of amusement, entertainment or recreation;
(23)
"data" has the meaning assigned to it in clause (o) of
sub-section (1) of section 2 of the Information Technology Act,2000;
(24)
"electronic form" has the meaning assigned to it in clause (r)
of sub section (1) of section 2 of the Information Technology Act, 2000;
(25)
" facsimile" (FAX)
means a form of telecommunication by which fixed graphic images, such as printed
texts and pictures are scanned and
the information converted into electrical signals for transmission over the
telecommunication system;
(26)
"financial institution" has the meaning assigned to it in
clause © of section 45-I of the Reserve Bank of India Act,1934;
(29)
"information" has the meaning assigned to it in clause (b) of
sub section (1) of section 2 of the Information Technology Act,2000;
(30)
"Insurance Agent" has the meaning assigned to it in clause (10)
of section 2 of the Insurance Act,1938;
(31)
"insurance auxiliary
service" means any service provided by an actuary, an intermediary or
insurance intermediary or an insurance agent in relation to general insurance
business and includes risk assessment , claim settlement, survey, and loss
assessment;
(32)
"intermediary or insurance intermediary" has the meaning
assigned to it in sub clause(f) of clause (1) of section 2 of the Insurance
Regulatory and Development Act, 1999;
(35)
"leased circuit" means
a dedicated link provided between two fixed locations for exclusive use of the
subscriber and includes a speech circuit, data circuit or a telegraph circuit;
(36)
"magnetic storage device"
includes wax blanks, discs or blanks, strips or films for the purpose of
original sound recording;
(44)
" non banking financial company" has the meaning assigned to it
in clause (f) of section 45-I of the Reserve Bank of India, 1934;
(45)
"on line information and data base access or retrieval" means
providing data or information, retrievable or otherwise, to a customer, in
electronic form through a computer
network;
(47)
"photography" includes still photography, motion picture
photography, laser photography, aerial photography and fluorescent photography;
(48)
"photography studio or agency" means any professional photographer or
a commercial concern engaged in the business of rendering service relating to
photography;
(50)
"port" has the meaning assigned to it in clause (q ) of section
of the Major Port Trusts Act, 1963;
(51)
"port services" means any service rendered by a port, in any manner,
in relation to a vessel or goods;
(60)
"scientific or technical consultancy" any advice, consultancy or
scientific or technical assistance, rendered in any manner, either directly or
indirectly, by a scientist or a technocrat or any science or technology
institution or organisation, to a client, in one or more disciplines of science
or technology;
(66)
"sound recording" means recording of sound on a magnetic storage
device and editing thereof, in any manner;
(67)
"sound recording studio or agency" means any commercial concern
engaged in the business of rendering any service relating to sound recording;
(72)
"taxable service" means any services provided -
(za) to a client, by a scientist or technocrat or any science or
technology institution or organisation, in relation to scientific or technical
consultancy;
(zb) to a customer, by a photography studio or agency in relation to
photography, in any manner;
(zc) to a client, by any commercial concern in relation to holding of
convention, in any manner;
(zd) to a subscriber, by the telegraph authority in relation to a leased
circuit;
(ze) to a subscriber, by the telegraph authority in relation to a
communication through telegraph;
(zf) to a subscriber, by the telegraph authority in relation to a
communication through telex;
(zg) to a subscriber, by the telegraph authority in relation to a
facsimile communication;
(zh) to a customer, by a commercial concern, in relation to online
information and data base access or retrieval or both in electronic form,
through computer network, in any manner;
(zi) to a client, by a video production agency in relation to video tape
production, in any manner;
(zj) to a client, by a sound recording studio or agency in relation to
any kind of sound recording;
(zk) to a client, by a broadcasting agency or organisation in relation to
broadcasting, in any manner;
(zl) to a policy holder by an actuary or intermediary or insurance
intermediary or insurance agent, in relation to insurance auxiliary services;
(zm) to a customer, by a banking company or financial institution,
including a non banking financial company, in relation to banking and other
financial services;
(zn) to any person, by a port, in relation to port services, in any
manner;
(zo) to a customer, by an authorised service station, in relation to any
service or repair of automobiles, in any manner;
and the term "service provider" shall be construed accordingly.
(73)
"telegraph" has the meaning assigned to it in clause (1) of section 3
of the Indian Telegraph Act, 1885;
(75)
"telex" means a typed communication by using teleprinters through
telex exchanges;
(81)
"vessel" has the meaning assigned to it in clause (z) of section 2 of
the Major Port Trusts Act, 1963;
(82)
"video production agency" means any professional videographer or any
commercial concern engaged in the business of rendering services relating to
video-tape production;
(83) "
video-tape production" means the process of any recording of any programme,
event or function on a magnetic tape and editing thereof, in any manner;
SECTION 66 OF THE FINANCE ACT 1994
(5)
With effect
from the date notified under section 130 of the Finance Act, 2001, there shall
be levied a service tax at the rate of five percent of the value of the taxable
services rendered to in sub-clauses (za), (zb), (zc), (zd), (ze), (zf), (zg), (zh),
(zi), (zj), (zl), (zm), (zn) and (zo) of clause (72) of section 65 and collected
in such manner as may be prescribed".
SECTION 67 OF THE FINANCE ACT 1994
(67)
For the purposes of this chapter, the value of any taxable service shall be the
gross amount charged by the service provider for such services rendered by him.
Explantion: For the removal
of doubt it is hereby declared that the value of taxable service, as the case
may be, includes-
(a)
the aggregate of commission or brokerage charged by a broker on the sale
or 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 telegraph or telex or for leased circuit;
(c)
the amount of premium charged by the insurer from the policy holder;
(d)
the commission commission received by the air travel agent from the
airline;
(e)
the commission received by an actuary or intermediary or insurance
intermediary or insurance agent from the insurer; and
(f)
the reimbursement received by the authorised service station from
manufacturer for carrying out any service of any automobile manufactured by such
manufacturer;
but does not include -
(a)
initial deposit made by the subscriber at the time of application for
telephone connection or pager or facsimile or telegraph or telex or for leased
circuit;
(b)
the cost of unexposed photography film, unrecorded magnetic tape such
other storage devices if any, sold to the client during the course of providing
the service; and
(c)
the cost of parts or accessories, if any, sold to the customer during the
course of service or repair of automobiles.;
It may be noted
that the levy will come into force only
from the date to be notified by the government, after the Finance Bill, 2001
receives the assent of the President.
(Issued
from File C.No.IV/16/304/2001 S.Tax)
Sd/----
(M. JAYARAMAN)
COMMISSIONER