EXEMPTION FROM SERVICE TAX

EXEMPTION FROM SERVICE TAX

Exemption to services provided by a person located outside India in relation to booking of accommodation for a customer located outside India in a hotel in India – Notification No. 14/2008 ST dated 01.03.2008

The taxable services provided by a person, having his place of business, fixed establishment, permanent address or usual place of residence, in a country other than India, and which is received by a hotel located in India, in relation to booking of an accommodation in the said hotel, for a customer, who has his place of business, fixed establishment, permanent address or usual place of residence, in a country other than India are exempt from whole of the service tax leviable thereon.

Hotel has been defined to mean a place that provides boarding and lodging facilities to public on commercial basis.

III.          ABATEMENTS

Notification No. 1/2006-ST dated 01.03.06

Notification No. 1/2006 ST dated 01.03.06 provides for abatements from gross value in case of certain specified services. These abatements will be discussed with relevant services.

1. SOME NOTIFICATIONS IN BULLETED POINTS:

Every year several Exemption Notifications are issued which grants exemption in specific cases. We are not required to know every such notification in detail. Therefore, I have converted all these notifications in small points. Read these points for simple understanding. .[1]

• Exemption to management, maintenance or repair of roads service - The taxable service provided to any person by any other person in relation to management, maintenance or repair of roads has been exempted from the whole of the service tax leviable thereon. [Notification No. 24/2009 ST dated 27.07.2009]
• Exemption to certain specified goods transported through national waterway, inland water and coastal shipping - The taxable service provided to any person in relation to the transport of specified goods through national waterway, inland water and coastal shipping has been exempted from whole of the service tax leviable thereon. Examples of goods exempt are Foodstuffs, Petroleum and petroleum products, Fertilizer, Medicine/pharmaceutical products, Defence/ military equipments, Newspaper/magazines etc. The above amendment became effective from 1st September, 2009. [Notification No. 30/2009 ST dated 31.08.2009]
• Exemption to the business auxiliary service provided by the sub-broker to a stockbroker - The business auxiliary service provided by a sub-broker to a stock-broker in relation to sale or purchase of securities listed on a registered stock exchange has been exempted from the whole of the service tax leviable thereon. [Notification No. 31/2009 ST dated 01.09.2009]
• Exemption to taxable service provided in relation to manufacture of specified goods charged to excise duty under Medicinal and Toilet Preparations (Excise  Duties) Act, 1955 -  The business auxiliary service provided by any person, to a client in relation to the  manufacture of pharmaceutical products, medicines, perfumery, cosmetics or toilet  preparations containing alcohol, which are charged to excise duty under Medicinal and  Toilet Preparations (Excise Duties) Act, 1955 has been exempted from the whole of the service tax leviable thereon. [Notification No. 32/2009 ST dated 01.09.2009]
• Exemption to service in relation to execution of a works contract in respect of canals, other than those primarily used for the purposes of commerce or industry - The works contract service provided in respect of canals, other than those primarily used for the purposes of commerce or industry, has been exempted from the whole of service tax leviable thereon. [Notification No. 41/2009 ST dated 23.10.2009]
• Exemption to Central and State Seed Testing Laboratories, and Central and State Seed Certification Agencies - Exemption from service tax has been granted to any service provided to any person in relation to the ‘technical testing and analysis service’ and ‘technical inspection and certification service’ provided by Central or State Seed Testing Laboratories, and Central or State Seed Certification Agencies notified under the Seeds Act, 1966. [Notification No. 10/2010 ST dated 27.02.2010].
• Exemption to transmission of electricity - Exemption from service tax has been provided to the taxable service provided to any person, by any other person for transmission of electricity. [Notification No. 11/2010 ST dated 27.02.2010].
• Exemption provided to Indian News Agencies subject to specified conditions - Exemption from service tax has been provided to Indian news agencies under ‘online information and database retrieval service’ and ‘business auxiliary service’ only if such  news agency:-

(i)  is notified as a news agency set up in India solely for collection and distribution of news,

(ii)  is specified under section 10(22B) of the Income Tax Act, 1961, and

(iii) applies its income or accumulates it for collection and distribution of news and does not distribute its income in any manner to its members.

[Notification No. 13/2010 ST dated 27.02.2010]

• Exemption of outdoor catering service provided by a NGO for Mid-Day Meal Scheme.- Exemption from service tax has been granted to outdoor catering service provided by a Non Government Organisation registered under any Central Act or State Act, under the Centrally assisted Mid-Day Meal Scheme.[ Notification No. 47/2010 - Service Tax, dated 3.09.2010]
• Exemption to the taxable service provided for distribution of electricity - Exemption from service tax has been granted to any person who is authorized to distribute power under the Electricity Act, 2003, for distribution of electricity.  [Notification No. 32/2010 - Service Tax, dated 06.2010]
• Exemption given to specified sponsorship services for tournaments and championships – Exemption from service tax has been granted in sponsorship services category for following tournamentsor championships organized:
• By National Sports Federations or Federations affiliated to such National Sports Federations, where the participating teams or individuals represent any District, State or Zone;
• By Association of Indian Universities – Inter-University Sports Board, School Games Federation of India, All India Sports Council for the Deaf,Paralympic Committee of India (for the physically challenged), Special Olympics Bharat (for the mentally challenged);
• By Central Civil Services Cultural and Sports Board;
• By Indian Olympic Association which are organised as part of National Games
• UnderPanchayat Yuva Kreeda Aur Khel Abhiyaan (PYKKA) Scheme. [Notification No. 30/2010 - Service Tax, dated 06.2010]
• Exemption to construction of complex when provided to Jawaharlal Nehru National Urban Renewal Mission and RajivAwaasYojana - Exemption from service tax has been granted to construction of complex service when provided to Jawaharlal Nehru National Urban Renewal Mission and Rajiv Awaas Yojana. [Notification No. 28/2010 - Service Tax, dated 06.2010]

[1] Notification no.’s need not to be learnt.

Follow Us on