TMI BlogService Tax under Finance (No. 2) Act, 1998X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Finance Act, 1994, an "architect" has been defined to mean any person whose name is, for the time being, entered in the register of architects maintained under Section 23 of the Architects Act, 1972 and also includes any commercial concern engaged in any manner, whether directly or indirectly, in rendering services in the field of architecture. The nature and scope of the services rendered by architects are well delineated under the provisions of the Architects Act. 3.2 Broadly, the work of an architect starts from providing appropriate advice keeping in view the requirements of the client at the preliminary stage of initial sketches, specifications and drawing of plans, and consists of providing detailed drawings, approval of the drawings from the concerned authorities, supervision at each stage of construction, and till the point when the completion certificate is obtained from the authorities. 3.3 The services rendered by an architect are of a very diverse nature and are spread over a fairly long period of time. At the time when an architect is actually engaged for a particular project, letters (contract) is exchanged for the same between the architect and the person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilarly, a market research agency would be required to pay service tax on services rendered by it to an advertising agency, even if the advertising agency is also liable to pay service tax on the amount billed to its client for advertising services (which, inter alia, includes the amount paid by the advertising agency for such market research services to the market research agency). 3.7 It is also clarified that service tax is not leviable on supply of materials, items of furniture or decoration, per se, but on services, rendered in any manner, concerning planning, design or beautification of spaces. Also the services rendered by Art directors of films and others who render services of design etc. for setting up temporary structures/settings for shootings etc. do not attract the service tax levy as such interior decoration has no permanency and is only of a temporary nature. B. Credit Rating Agencies (i) As per Section 65(15) of the Finance Act, 1994, "credit rating agency" means any commercial concern engaged in the business of credit rating of any debt obligation or of any project or programme requiring finance, whether in the form of debt or otherwise, and includes credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financial obligation, instrument or security. Services of research and information such as analysis of industries in specific sectors, of financial and business outlook of a company, other customised services on say business houses and capital markets, indexing services, and information services, such as, privatisation policy for infrastructure projects, macro studies of infrastructure sector, implication of Government policy in respect of any sector, financial modelling, bid evaluation, power purchase agreements, restructuring of SEBs etc. are not services "in relation to" the credit rating of any financial obligation, instrument or security and are hence outside the gamut of service tax on the services of credit rating. (iv) The amount received in advance for the service of rating to be provided to the client, is only an advance and the services can only deemed to have been provided only when the rating exercise has been completed, i.e. when rating of any instrument has been assigned. In case rating is not done, for any reason, and the entire amount is returned back to the client, it cannot be said that services have been rendered and hence service tax is not attracted. Similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble on all taxable services rendered in India, whether to an Indian or foreign client. However, services rendered aboard shall not attract service tax levy as service tax extends only to services provided within India. (iv) Another concern that has been raised is whether service tax is payable on the reimbursable/out-of-pocket expenses charged to the client on actual basis. As regards charges billed to the client on account of out of pocket expenses which are reimbursable on actual basis, such as, travelling, boarding and lodging expenses is concerned, the same are not subject to service tax. In this respect, the service tax assessee may be required by the jurisdictional Commissioner of Central Excise to provide documentary evidence substantiating his claim for abatement from the gross amount received from the client for services rendered. Similar dispensation in respect of reimbursable/out-of-pocket expenses charged to the client on actual basis is also available in respect of other services. D. Management Consultants (i) As per Section 65(21) of the Finance Act, 1994, "management consultant" means any person who is engaged in providing any service, either directly or indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of providing security personnel. The ambit of the term security agency is wide enough to include not only agencies rendering services of providing security but also detective agencies which are providing confidential services in respect of say, financial credibility of any person, trade mark/ copyright infringements etc. Most of the security agencies are only registered under the Shops and Establishments Act. These agencies may not be required to take a licence under any other statutes. (ii) An issue that has been raised is whether service tax is leviable on the entire amount charged to the clients to whom security guards/personnel have been provided as the bulk of the charges represent salary to the employee (at least the minimum wage prescribed under the law), employer's ESI and EPF contribution, income tax deduction at source, payment towards professional tax and labour welfare fund and other non-statutory charges such as bonus, leave, uniforms, incidental expenses and other administrative and miscellaneous expenses. It is clarified that no such abatement from the amount charged to the client for services rendered is available for purpose of computing the service tax liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from Rs. 1,000 to Rs. 100 per bovine animal vide Notification No. 58/98-S.T., dated 7-10-1998. H. Underwriting Services (i) As per Section 65(53) and Section 65(54) of the Finance Act, 1994, "underwriter" has the meaning assigned to it in clause (f) of Rule 2 of the Securities and Exchange Board of India (Underwriters) Rules, 1993 and "underwriting" has the meaning assigned to it in clause (g) of Rule 2 of the Securities and Exchange Board of India (Underwriters) Rules, 1993. According to the Securities and Exchange Board of India (Underwriters) Rules, 1993, "underwriter' means a person who engages in the business of underwriting of an issue of securities of a body corporate and "underwriting" means an agreement with or without conditions to subscribe to the securities of a body corporate when the existing shareholders of such body corporate or the public do not subscribe to the securities offered to them. The "taxable service" means the service provided to a client by an underwriter in relation to underwriting. (ii) Underwriting services can be provided by financial institutions, banks, share brokers who are members of stock exchanges and investment/companies/trusts with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a person who is a member of the Institute of Company Secretaries of India and is holding a certificate of practise granted under the provisions of the Company Secretaries Act, 1980 and includes any concern engaged in rendering services in the field of company secretaryship. (ii) The nature and scope of the services rendered by the chartered accountants, cost accountants and company secretaries are delineated under the respective enactments and the rules and regulations made thereunder. The services rendered by these professions are of a specialised nature and is provided by virtue of their professional experience and specialised education. (iii) One of the issues raised is whether the service tax is leviable on services rendered by chartered accountants on services which are not exclusively performed by them, but also by others such as advocates etc. It has been decided that service tax is to be paid only on services of auditing and accounting rendered by practising chartered accountants in their professional capacity. The services rendered by chartered accountants which shall attract service tax, include audit/certification services required to be rendered in terms of various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended, every person liable for paying the service tax shall make an application to the concerned Central Excise Officer appointed under Rule 3 in Form ST-1 for Registration within a period of 30 days from the date on which the service tax under Section 66 of Finance Act, 1994 (32 of 1994) is levied. Notification No. 54/98-S.T., dated 7-10-1998 may be referred in this regard. (B) Registration : (i) The assessee will apply for registration in respect of above category of services in Form ST-1 (Annexure-I) to the Superintendent (Tech) of the jurisdictional Assistant Commissioner Office in all cases except Division I II, Indore where the assessee shall get registration from Superintendent Range-VI and Superintendent Range-Dhar respectively and get acknowledgement on the duplicate copy of the ST-1 from the concerned Superintendent. (ii) The Central Excise officer shall after due verification of the application form, grant a certificate of registration in Form ST-2 within 7 days from the date of receipt of the application. If the registration certificate is not granted within the said period, the registration applied for shall be deemed to have been granted. The registration N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax deposited and the service tax liable to be paid for each month in a memorandum in Form ST accompanying the quarterly or half yearly return, as the case may be. (6) Where the assessee submits a memorandum in Form ST 3A under sub-rule (5), it shall be lawful for the Central Excise Officer to complete the assessment, wherever he deems it necessary, after calling such further documents or records as deemed necessary and proper in the circumstances of the cases. Explanation :- For the purposes of this rule and Rule 7, "Form TR 6" means a memorandum or challan referred to in Rule 92 of the Treasury Rules of the Central Government. (7) Returns - (i) Every assessee shall submit a half-yearly return in Form `ST 3', as the case may be, along with a copy of the Form TR 6, in triplicate for the months covered in the half-yearly return. (ii) Every assessee shall submit the half yearly return by the 25th of the month following the particular half year. (iii) The Central Excise Officer shall thereupon, assess the service tax payable including interest, if any, payable thereon and complete the assessment memorandum. A copy of the return so assessed shall be sent to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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