Applicability of service tax on fee collected by Public Authorities while performing statutory functions /duties under the provisions of a law – regarding

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..... / 7 /2006- Service Tax New Delhi, the 18 th December, 2006 F.No. 255/1/2006-CX.4 Government of India Ministry of Finance Department of Revenue (Central Board of Excise and Customs) To Chief Commissioners of Central Excise (All) Chief Commissioners of Customs Central Excise (All) Commissioners of Service .....

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..... Directorate of Boilers inspects and issues certificate for boilers; or Explosive Department inspects and issues certificate for petroleum storage tank, LPG/CNG tank in terms of provisions of the relevant laws. Fee as prescribed is charged and the same is ultimately deposited into the Government Treasury. A doubt has arisen whether such activities provided by a sovereign/public authority required t .....

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..... authority under the provisions of law does not constitute provision of taxable service to a person and, therefore, no service tax is leviable on such activities. 3. However, if such authority performs a service, which is not in the nature of statutory activity and the same is undertaken for a consideration not in the nature of statutory fee/levy, then in such cases, service tax would be levia .....

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