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2024 (1) TMI 8 - KARNATAKA HIGH COURTExemption from service tax - Providing computer training services on behalf of Municipal corporation - sub-clause (a) of Section 66D of Finance Act, 1994 - payment made by the Corporation to the petitioners would amount to services - HELD THAT:- Sub-Section (a) of Section 66D of Finance Act, 1994 has been reproduced hereinabove which indicates that the services by Government or local authority excluding the services under sub-clause (i) to sub-clause (iv) thereof would be in the negative list and in terms thereof no service tax would be payable on such services - In the present case, the Corporation has entered into an agreement with the petitioners to render computer training to persons identified by the Corporation as regards which those persons did not make payment of money, but the payment was made by the Corporation to the petitioners. The present transaction would not come within the purview of sub-section (a) of Section 66D of Finance Act, 1994. The matter would have been different if the concerned candidate paid the money to the Corporation, then the Corporation would not be required to make payment of any service tax on that amount. However, so long as the payment is made by the concerned candidate to the petitioners or by the Corporation to the petitioners, the service provider being the petitioners, there is an obligation on part of the petitioners to collect the service tax from the payee and be remitted to the concerned department - the stand taken by the Corporation that it is exempted from making payment under Section 66D of Finance Act is of no avail. The Corporation availing the services of the petitioners to render computer education to persons belonging to economically weaker section as regards which the Corporation has made the payment of monies to the petitioners would be amenable to service tax, that is to say, it is not exempted from service tax - Petition allowed.
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