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The intricacies of service-tax liabilities
November, 27th 2009

We have started an authorised service station in Gurgaon, exclusively for service and repair of trucks. We have come to know that services provided by an authorised service station comes under the purview of taxable service of authorised service station services and, therefore, liable to service tax. Please advice.

The activity of service and repair of motor vehicles is covered under the taxable service category of authorised service station services. Further, the aforesaid taxable service category is defined as any service station, or centre, authorised by any motor vehicle manufacturer, to carry out any service, repair, reconditioning or restoration of motor cars, light motor vehicles or two-wheeled motor vehicles, in any manner.

In this regard, the Central Board of Excise & Customs has clarified that servicing of heavy vehicles like trucks, not being one of the specified categories of motor vehicles, is at present not covered within the scope of the said taxable service. Accordingly, you would not be required to pay service tax on maintenance and repair services pertaining to trucks.

We are a team of designers and architects rendering advice, consultancy or technical assistance to our clients, and registered with the service tax department under the taxable service category of consulting engineer services. We have also started a drawing and design company, wherein we sell standard drawings to our customers and also prepare drawings as per the specifications provided by them. Please advise whether such an activity would attract service tax.

Service tax under consulting engineer service is leviable in the nature of advice, consultancy or technical assistance rendered to the service receiver. It is not levied on sale and purchase of any commodity.

Hence, pure sales transactions of drawings will not attract service tax. However, if a customer seeks your services to prepare designs/drawings as per his specifications/requirements or requires any modifications to be carried out to existing designs/drawings, then such services would attract service tax.

Further, if the services are provided in relation to designing of furniture, consumer products, industrial products, packages, logos, graphics, websites and corporate identity designing and production of three dimensional models, then it would come under the purview of the taxable category of design services and attract service tax.

We have recently started up a chain of physiotherapy centres operating in Delhi and NCR region. We provide massage for treatment of arthritis, paralysis, etc. by trained physiotherapists and doctors in our centres. We have come to know that such an activity may attract service tax under the taxable service category of health and fitness services. Please clarify.

Under the service tax laws, health and fitness services are defined as services for physical well-being such as, sauna and steam bath, Turkish bath, solarium, spas, reducing or slimming salons, gymnasium, yoga, meditation, massage (excluding therapeutic massage) or any such service. The therapeutic massages are specifically excluded from the ambit of service tax.

The Central Board of Excise and Customs has clarified vide a circular that therapeutic massage basically means a massage provided by qualified professionals under medical supervision for curing diseases/ disorders such as arthritis, paralysis, etc. In the event your activity qualifies as therapeutic massage, then it would not come under the ambit of service tax and accordingly, the tax would not be leviable.

However, if the massage is performed without medical supervision or advice but for general physical well-being of a person, such massage would not come under the purview of therapeutic massage and accordingly would be liable to service tax.

We are a team of alumni of various prestigious engineering colleges in the country and have set up a government-approved private engineering institute in Delhi. Various multinational companies and corporate houses visit our institute for recruitment purposes.

Accordingly, we charge a fee from them for services provided in relation to facilitating the recruitment process like arranging interviews, availability of candidates and so on. Please clarify whether such an activity would be liable to service tax.

Services provided in relation to recruitment are covered under the taxable service category of manpower recruitment or supply agency services. So, the consideration received by you from multinational companies and corporate houses for facilitating of recruitment process would be liable to the service tax.

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