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SERVICE TAX ON AGGREGATOR'S SERVICES

Service Tax - By: - Dr. Sanjiv Agarwal - Dated:- 27-3-2015 - The aggregators who were till now not specifically covered under the Service Tax net on strict interpretation of law and could not catch the attention of revenue authorities came under the radar of one and all in Indian regulatory world once the app based cab services received the attention after Uber fiasco. In case of aggregator model of services, it was a dispute as to who is the service provider and who is service receiver. The def .....

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he aggregator is being made liable to pay Service Tax if the service is provided using the brand name of aggregator in any manner. Meaning of Aggregator The word 'aggregate' literally means a whole formed by combining several elements; formed by the combination of many separate items or units. The aggregator is one, who therefore aggregates or causes aggregation of units, items, things or services. Rule 2(aa) of Service Tax Rules as inserted by the Service Tax (Amendment) Rules, 2015 vid .....

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as under: (bca) 'brand name or trade name' means, a brand name or a trade name, whether registered or not, that is to say, a name or a mark, such as an invented word or writing, or a symbol, monogram, logo, label, signature, which is used for the purpose of indicating, or so as to indicate a connection, in the course of trade, between a service and some person using the name or mark with or without any indication of the identity of that person. For this definition of aggregator, followin .....

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name (like ola, uber, taxi for sure and so on) can be a name or a mark such as - invented word or writing,. a symbol, monogram, logo, label or signature which is - registered or otherwise used for the purpose of indicating or indicate a connection a connection between service and person using name or mark in course of trade and such connection is with or without indication of identify of that person. With app-based companies gaining popularity, a new business model is bringing drivers, .....

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aggregator gets only commission for each drive. Examples of the aggregators include Uber, Ola cabs, Flipkart, Snapdeal, Amazon, Airbnb, Expedia, Groupon, Blabla car, Tripda etc. The aggregators would include online service providers that own and manage a web based software application. In respect of any service provided under aggregator model, the aggregator, or any of his representative office located in India, is being made liable to pay Service Tax if the service is so provided using the bran .....

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shall be the person liable to pay Service Tax in relation to services involving an aggregator. The definition of aggregator has been brought under Service Tax Rules, 1994 and such aggregators have been made person liable to pay Service Tax. Rule 2(1) (d)(i) (AAA) reads as under - (AAA) in relation to service provided or agreed to be provided by a person involving an aggregator in any manner, the aggregator of the service: Provided that if the aggregator does not have a physical presence in the .....

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