Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: TAX RATES - GOODS TAXABLE @ 4% :: VAT RATES :: due date for vat payment :: ACCOUNTING STANDARDS :: ACCOUNTING STANDARD :: form 3cd :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt :: articles on VAT and GST in India :: TDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: Central Excise rule to resale the machines to a new company :: empanelment :: list of goods taxed at 4% :: VAT Audit
 
 
« Latest Circulars »
 RBI launches the March 2017 Round of Consumer Confidence Survey (CCS)
 Sovereign Gold Bonds, 2016-17 – Series IV - Operational Guidelines
 Sovereign Gold Bond Scheme 2016 -17 - Series IV - Issue Price
 Master Direction – Money Transfer Service Scheme (MTSS)
 Payment Systems - Next Orbit (Shri R. Gandhi, Deputy Governor - February 20, 2017 - at the launch of Bharat QR Code at Hotel Trident, Mumbai)
 Financing MSMEs: Banks & FinTechs – Competition, Collaboration or Competitive Collaboration? (Shri S. S. Mundra, Deputy Governor – February 20, 2017 – at the NAMCABS Seminar organized by College of Agricultural Banking in Mumbai)
 Issuance of Rupee denominated bonds overseas – Multilateral and Regional Financial Institutions as Investors
 RBI-Formation of twenty one new districts in the State of Telangana - Assignment of Lead Bank Responsibility
 RBI imposes penalty on Janata Urban Co-operative Bank Ltd., Wai, District Satara
 Monitoring of Foreign Investment under PIS in Indian Companies- Incorporation in Ban List–M/s HDFC Bank Ltd.
 Reserve Bank of India seeks Comments on Draft Circular on Rationalisation of Merchant Discount Rate (MDR) for Debit Card Transactions

Service Tax Circular No.125/7/2010
July, 31st 2010

Circular No.125/7/2010 - ST

F.No.354/35/2010-TRU

Government of India

Ministry of Finance

Department of Revenue

Tax Research Unit

..

   North Block, New Delhi

 

30th July, 2010

To

 

Chief Commissioners of Central Excise and Service Tax (All),

Director General (Service Tax),

Director General (Central Excise Intelligence),        

Director General (Audit),

Commissioners of Service Tax (All),

Commissioners of Central Excise and Service Tax (All).

 

 

Madam/Sir,

 

Subject:  Services provided by state governments under Centrally Sponsored Schemes (CSS) -- regarding.

 

 

            In the recent past, instances have come to the notice of the Board, where field formations have demanded service tax from State governments or their departments/ agencies, for providing certain services under the centrally sponsored schemes (CSS).  To cite an illustration, in the case of the centrally sponsored National Biogas and Manure Management Program operating under Ministry of New and Renewable Energy, State government agencies were involved in setting up of bio-gas plants in villages. Certain expenses  incurred by the State governments or their departments/ agencies during the course of setting up of such bio-gas plants were reimbursed by the central government by way of a grant under the CSS. Jurisdictional service tax authorities demanded service tax from the State government department/agency, saying that the reimbursements received by the concerned State government department/agency (as service provider) are nothing but consideration for installation and commissioning service received from the central government (service receiver).

 

2.         Implicit in this service tax demand is an assumption that the relationship between Central government and the State government is an equivalent of a relationship between principal and the agent. This assumption is questionable as under administrative arrangement, State governments are bound to implement the centrally sponsored schemes on receipt of a grant. The fact that State governments are implementing agencies for the Central government within the framework of CSS does not make them service providers. Consequently, Central government cannot be taken as service receiver. Grant released by the Central government under a centrally sponsored scheme cannot be presumed as consideration for providing a taxable service.

 

3.         Levy and collection of service tax on State government agencies/departments implementing CSS under a central grant, is not legally tenable and therefore in such cases service tax should not be demanded.

 

4.         Trade Notice/Public Notice may be issued to the field formations.

 

5.         Please acknowledge receipt of this Circular. Hindi version follows.

(J. M. Kennedy)

Director (TRU)

Tel: 011-23092634

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Vision

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions