TMI BlogRules of Interpretation.X X X X Extracts X X X X X X X X Extracts X X X X ..... - In the negative list of services. In the declared list of services. In exemption notifications. In the Place of Provision of Service Rules, 2012 In a few other rules and notifications e.g. Cenvat Credit Rules, 2004 . There are two principles laid down which are contained in clauses (1) and (2) of section 66F of the Act. 9.1.1 What is the scope of the clause (1) of section 66F: 'Unless otherwise specified, reference to a service (hereinafter referred to as the "main service") shall not include reference to a service which is used for providing the main service' This rule can be best understood with a few illustrations which are given below - 'Provision of access to any road or bridge on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Shamiana is an existing service and will remain a subject of taxation. Likewise service provided by way of catering is a taxable service and entitled to abatement. There is abatement when the two are provided in combination. Since the combination is more a specific entry than the two provided individually, there is no need to apply the later rule of bundled services, where the character could be judged by the service which provides it the essential character. 9.2 Taxability of 'bundled services'. 'Bundled service' means a bundle of provision of various services wherein an element of provision of one service is combined with an element or elements of provision of any other service or services. An example of 'bundled service' would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes, Tea and coffee during conference Access to fitness room for the delegates Availability of conference room Business centre As is evident a bouquet of services is being provided, many of them chargeable to different effective rates of tax. None of the individual constituents are able to provide the essential character of the service. However, if the service is described as convention service it is able to capture the entire essence of the package. Thus the service may be judged as convention service and chargeable to full rate. However it will be fully justifiable for the hotel to charge individually for the services as long as there is no attempt to offload the value of one service on to another service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down in sub-section (3) relating to 'bundled services'. In other words, if a bundled service falls under a service specified by way of a description then such service would be covered by the description so specified. The illustration, relating to a bundled service wherein a pandal and shamiana is provided in combination with catering service, given in the second bullet in para 7.1.2 above explains the operation of this rule. 9.2.4 Manner of determining if the services are bundled in the ordinary course of business Whether services are bundled in the ordinary course of business would depend upon the normal or frequent practices followed in the area of business to which services relate. Such normal and frequent practices adopted in a bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o matter how much of the package they actually receive or use. The elements are normally advertised as a package. The different elements are not available separately. The different elements are integral to one overall supply - if one or more is removed, the nature of the supply would be affected. No straight jacket formula can be laid down to determine whether a service is naturally bundled in the ordinary course of business. Each case has to be individually examined in the backdrop of several factors some of which are outlined above. 9.2.5 Manner of determination of taxability of 'composite transactions' wherein an element of provision of service is combined with an element of sale of goods Please refer to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
