TMI BlogExemptions.X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Schedule to the said Act apply. Illustrative list of specified international organisations are as follows: 1. International Civil Aviation Organisation 2. World Health Organisation 3. International Labor Organisation 4. Food and Agriculture Organisation of the United Nations 5. UN Educational, Scientific and Cultural Organisation (UNESCO) 6. International Monetary Fund (IMF) 7. International Bank for Reconstruction and Development 8. Universal Postal Union 9. International Telecommunication Union 10. World Meteorological Organisation 11. Permanent Central Opium Board 12. International Hydrographic Bureau 13. Commissioner for Indus Waters, Government of Pakistan and his advisers and assistants 14. Asian African Legal Consultative Committee 15. Commonwealth Asia Pacific Youth Development Centre, Chandigarh 16. Delegation of Commission of European Community 17. Customs Co-operation Council 18. Asia Pacific Telecommunity 19. International Centre of Public Enterprises in Developing Countries, Ljubljana (Yugoslavia) 20. International Centre for Genetic Engineering and Biotechnology 21. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as may be specified therein, with respect to ( i ) the preparation of plans for economic development and social justice; ( ii ) the performance of functions and the implementation of schemes as may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule; ( b ) the Committees with such powers and authority as may be necessary to enable them to carry out the responsibilities conferred upon them including those in relation to the matters listed in the Twelfth Schedule.' Matters listed in twelfth schedule are: 1. Urban planning including town planning. 2. Regulation of land-use and construction of buildings. 3. Planning for economic and social development. 4. Roads and bridges. 5. Water supply for domestic, industrial and commercial purposes. 6. Public health, sanitation conservancy and solid waste management. 7. Fire services. 8. Urban forestry, protection of the enviro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c health by way of- (I) care or counseling of (i) terminally ill persons or persons with severe physical or mental disability, (ii) persons afflicted with HIV or AIDS, or (iii) persons addicted to a dependence-forming substance such as narcotics drugs or alcohol; or (II) public awareness of preventive health, family planning or prevention of HIV infection; ( b ) advancement of religion or spirituality; ( c ) advancement of educational programmes or skill development relating to,- (I) abandoned, orphaned or homeless children; (II) physically or mentally abused and traumatized persons; (III) prisoners; or (IV) persons over the age of 65 years residing in a rural area; ( d ) preservation of environment including watershed, forests and wildlife; or ( e ) advancement of any other object of general public utility up to a value of twenty five lakh rupees in a financial year subject to the condition that total value of such activities had not exceeded twenty five lakh rupees during the preceding financial year. 7.4.2 What is the tax liability of a registered charity on their activities? If a registered charity is doing any activity fall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing financial year, tax is required to be paid on reverse charge by the business entities. Business entity is defined in section 65B of the Finance Act, 1994 as 'any person ordinarily carrying out any activity relating to industry, commerce or any other business or profession'. Thus it includes sole proprietors as well. The business entity can, however, take input tax credit of such tax paid in terms of Cenvat Credit Rules, 2004, if otherwise eligible. The provisions relating to arbitral tribunal are also on similar lines. 7.6.2 I am serving as a member of an arbitral tribunal comprising many arbitrators and receiving an amount from the arbitral tribunal. Am I providing a service and required to pay service tax on such amount received? Arbitral tribunal comprising more than one arbitrator will constitute an entity by itself. Thus services of individual arbitrator when represented on such an arbitral tribunal will also constitute service by one person to another. However such service is exempt under sr. no. 6(c) of the mega notification. 7.7 Recreational coaching or training (Details at Sr. No. 8 of Exhibit A3) 7.7.1 What is the scope of exemption to coachin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous building 7.9.2 What is the significance of words predominantly for use other than for commerce, industry, or any other business or profession? The exemption is available for a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession. The significance of the word predominantly is that benefit of exemption will not be denied if the building is also incidentally used for some other purposes if it is used primarily for commerce, industry, or any other business or profession. 7.9.3 I am a contractor in number of projects for constructing roads. What is my tax liability on construction of roads under different types of projects? Construction of roads for use by general public is exempt from service tax. Construction of roads which are not for general public use e.g. construction of roads in a factory, residential complex would be taxable. 7.9.4 I am engaged in construction of hospitals and educational institutes. Am I required to pay service tax? If you are constructing such structures for the government, a local authority or a governmental authority, you are not required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural produce as food stuff excluding alcoholic beverages. You are processing wheat which is made from processing an agricultural produce. Similarly erection or installation of machineries or equipment for dal mills, rice mills, milk dairies or cotton ginning mills would be exempt. 7.10 Copyright (Details at Sr No 15 of Exhibit A3) 7.10.1 Will a music company having the copyright for any sound recording be taxable for his activity of distributing music? Temporary transfer of a copyright relating to original literary, dramatic, musical, artistic work or cinematographic film falling under clause (a) and (b) of sub-section (1) of section 13 of the Indian Copyright Act, 1957 is exempt. A music company would be required to pay service tax as the copyright relating to sound recording falls under clause (c) of sub-section (1) of section 13 of the Indian Copyright Act, 1957. 7.10.2 I am a composer of a song having the copyright for my song. When I allow the recording of the song on payment of some royalty by a music company for further distribution, am I required to pay service tax on the royalty amount received from a music company? No, as the copyright relating to ori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out excluding any discount offered on the published charges for such unit. Its relevance is in determining the liability to pay service tax on renting of a hotel, inn, guest house, club, campsite or other commercial places meant for residential or lodging purposes as exemption is available where declared tariff of a unit of accommodation is below rupees one thousand per day or equivalent. However, the tax will be liable to be paid on the amount actually charged i.e. declared tariff minus any discount offered. Thus if the declared tariff is Rs 1100/-, but actual room rent charged is Rs 800/-, tax will be required to be paid on Rs 800/-. When the declared tariff is revised as per the tourist season, the liability to pay tax shall be only on the declared tariff for the accommodation where the published/printed tariff is above Rupees 1000/-. However, the revision in tariff should be made uniformly applicable to all customers and declared when such change takes place. 7.11.4 I am running a hotel having the facility of central air-conditioning. There are number of restaurants in the hotel. Am I liable to pay service tax on to serving of food or beverages in these restaurants? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules, 2006 subject to compliance with the specified conditions. 7.11.9 I am a Resident Welfare Association (RWA). The members contribute an amount to RWA for holding camps to provide health care services to poor men and women. Am I required to pay tax on contribution received from members? No. You are not required to pay service tax on the contribution received as you are carrying out any activity (holding camps to provide health care services) which is exempt from the levy of service tax. If contribution is for carrying out an activity which is taxable, you are required to pay service tax. 7.11.10 What is the tax liability on services by the intermediaries to entities those are liable to pay tax on their final output services? (Details at Sr. No 29 of Exhibit A3) Services by following intermediaries are exempt from service tax: A. sub-broker or an authorised person to a stock broker; B. authorised person to a member of a commodity exchange; C. mutual fund agent to a mutual fund or asset management company; D. distributor to a mutual fund or asset management company; E. selling or marketing agent of lottery tickets to a distributer or a se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e production process as job work for his clients? Any process amounting to manufacture or production of goods is in the negative list. If process does not amount to manufacture or production of goods, and is further not covered in clause 30 of the mega notification, the same is liable to service tax. 7.11.13 Whether service tax is leviable on telephone services rendered by M/s. BSNL through Village Panchayat Telephone (VPT) with local call facility, as M/s. BSNL is a public sector unit and telephones run by it cannot be treated as 'departmentally run telephones'? As per Sl. No. 32 of the mega-exemption Notification in addition to exemption to 'departmentally run telephones' there is exemption for 'Guaranteed Public Telephone operating only for local calls' also. Village Public Telephones (VPTs) with facility of local calls (without 9 dialing facility or STD facility) run by BSNL would fall under the category of 'Guaranteed Public Telephone operating only for local calls'. 7.11.14 I am in the business of running a chain of restaurants. I intend to sell my business. Am I required to pay service tax? Services by way of transfer of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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