Applicability of service tax for providing cleaning service to School Building, Service Tax

[Balaknath Bhattacharyya]

As per section 65(24b) Cleaning activity for the purpose of applicability of service tax includes cleaning and specialised cleaning of commercial and industrial building but excludes such service in relation. to agriculture,horticulture,animal husbandry and dairying . But there is no mention of school building. My query is: whether service tax is applicablefor providing such service  to school building or other educational building owned or maintained by government/public sector or by private sector. 

Posts / Replies

[raj kumar shukla]

As per para 9.3of CBEC Circular Fno. B1/6/9.2005-TRU dtd 27-07-2005 ,cleaning services in respect of non commercial building and premises thereof would not be covered within the purview of service Tax under this category.Further taking a cue from para13.2 of circular no. 80/10/2004 -ST dated 17-9-2004 which albeit is in context of commercial construction we may say that schools are not commercial construction.circular saysSUCH CONSTRUCTIONS WHICH ARE FOR USE OF ORGANIZATIONS OR INSTITUTIONS BEING ESTABLISHED SOLELY FOR EDUCATIONAL,RELIGIOUSCHARITABLE, HEALTH,SANITATION OR PHILANTHROPIC PURPOSES AND NOTFOR THE PURPOSES OF PROFIT ARE NON TAXABLE BEING NON COMMERCIAL IN NATURE.

you may take the decision accordingly.Get youe case fortified by getting the nature of building verified from local bodies..

[DEV KUMAR KOTHARI]

Whether school is a commercial institution or charitable institution ,need to be examined. The nature of service whcih is taxable can be considered of sepcialised type and not general cleaning activity. There can be disputes on all these issues.

So better is to have in house cleaning activity to reduce costs to school and burden on students.

[NEERAJ KUMAR, RANCHI]

Dear Mr Bhattacharya,

In my opinion providing cleaning services to a govt school will certainly not attract service tax.the provision provides:

"Commercial or industrial; buildings and premises thereof; or

factory, plant or machinery tank or reservoir of such commercial or industrial buildings and premises thereof, but doe not include such services in relation to agriculture, horticulture, animal husbandary or dairying "

This means that even if  the activity of agriculture, horticulture, animal husbandary or dairying is commercial however cleaning services to the same will not attract service tax. To be more clear  if the intention of the school is not to earn profit and thus not commerical and therefore will not attract service tax