TMI Blog2007 (9) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivity of practicing Chartered Accountant or under any other alternative classification proposed subsequently? This category of activity has come into existence in 2006 under the 'Support Services of Business or Commerce'. 2. The Service provider being a Chartered Accountant obtained the outsourcing work form M/s. MESCOM, KPTCL and KEB. The activity was done by an ordinary SSLC passed candidates and not by an aspirant clerical staff who wants to become a Chartered Accountant. This was an additional activity taken up by the Chartered Accountant, which was not connected with professional work of Chartered Accountant's Act 1949. They contended that the Minimum Wages Act was applicable to the employees and the Contract Labours (Regulation and Abolition Act, 1970). The payment to the employees were based on the number of electricity meters checked by them and details collected for billing purpose. It was a mere billing and accounting work not connected to the professional capacity and it was an outsourcing work which has come into existence in 2006 under the category of 'Support Service of Business or Commerce'. They also referred to Board's Circular N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounting service of a practicing chartered accountant. The appellant also claimed alternative classification under Business Support Services coming into existence only in 2006. 3. The issue of dispute is mainly whether the appellant offered his services in his professional capacity of a practicing chartered accountant and if the service offered amounted to professional service of accounting liable to attract Service Tax in terms of Notification No. 59/1998-ST. 4. I find from the case record that service contract was offered to the appellant on account of his being an empanelled chartered accountant. This shows that services were sought and offered in professional capacity only. But a careful examination of contractural responsibilities, obligations and conditions reveal that it is not a contract for availing professional accounting services of a chartered accountant. It is mainly a contract for outsourcing operations of ledger maintenance relating to billing activities of M/s. MESCOM where the appellant was obliged to provide the manpower and take responsibility of maintaining true and proper accounts in accordance with given plans and specifications The manpower so provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of accounting done by a practicing chartered accountant attracting Notification No. 59/1998-ST for levy of Service Tax since all services rendered by a practicing chartered accountant were not subject to Service Tax unless they figured in the list of taxable services appearing in Notification No. 59/1998-ST. In the present case the relevant service is that of accounting and auditing appearing at Sl. No. [i] of list of taxable services of Notification No. 59/1998. 9. The appellant has contested with some force that services rendered by him was that of book keeping/ledger maintenance for area specified in the contract and not of professional accounting by a Chartered accountant which has a different scope and meaning. 10. I find from the written submission and extracts from a text book on Accountancy by B.S. Raman, furnished at the time of personal hearing, by other appellants in cases of appeal involving similar facts and issues, 'that book keeping/ledger maintenance though an essential part of accounting process, cannot by themselves amount to a professional service of accounting offered by a practicing chartered accountant. Book keeping or ledger maintenance is the proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1998-ST. 12. In Para 5 of Grounds of Appeal the appellant claims that classification under Business Auxiliary Services was applicable during the relevant period. I however find no evidence of his having filed any declaration or discharged any liability under this classification. The classification claimed now under Business Support Service is not applicable for services rendered during 1999-2001 as the new classification has been introduced only in 2006. Moreover Notification No. 59/1998-ST itself has been withdrawn as a result of which any services provided by a practicing chartered accountant will now attract Service Tax under classification of practicing chartered accountant only. The submission of the appellant is therefore irrelevant in so far as classification under Business Support Service is concerned. The issue of alternative classification under Business Auxiliary Service has however not been taken up in the impugned order. 13. In view of above discussion, I set aside the impugned order confirming liability of Service Tax and other consequential liabilities under the classification of services of practicing chartered accountant for services of ledger maintenance ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of activity which has been outsourced need not be done by professional Chartered Accountant and such work has been given on contract to non professionals also and refers to the contracts dated 1.9.1999 between the KPTCL and a person by name Shri Harinakshi. There are several such types of agencies who are carrying on the work of meter reading and preparing the bills and maintaining the ledgers. The MESCOM, KPTCL and KEB found this activity to be burdensome during the computerization period and therefore, they outsourced these activities. It has nothing to do with the professional activity of Chartered Accountant. He points out to the Board's Circular which clearly lays down that the 'Business Support Service' brings into its ambit the services like transaction processing, routine administration or accountancy, customer relationship management and telemarketing. He points out that the activity done by the service provider in these cases has been subsequently brought under a separate category of 'Support Services of Business or Commerce'. Therefore, the Commissioner (A) was right in dropping the demands in Revenue's appeals. 6. On a careful consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpression Management Consultancy Services as follows : 'Management Consultancy Services' shall not include the functions of statutory or periodical audit, tax (both direct taxes and indirect taxes) representation or advice concerning tax matters or acting as liquidator, trustee, executor, administrator, arbitrator or receiver, but shall include the following. i) Financial management planning and financial policy determination ii) Capital structure planning and advice regarding raising finance by issue of capital or by way of borrowings. iii) Working Capital Management. iv) Preparing Project Reports and feasibility studies. v) Preparing Cash Budgets, Cash flow statements, profitability statements, Statement of Sources and application of funds etc. vi) Budgeting including capital budgets and revenue budgets. vii) Inventory managements, material handling and storage. viii) Price-fixation, and other management decision-making. ix) Management accounting systems, Cost Control and value analysis. x) Control methods and Management Information and Reporting. xi) Personnel recruitment and selection. xii) Setting up executive incentive plans, w ..... 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