1 All India Chartered Accountants Society 4th Workshop on Service Tax (Session XX II) Date: 23 July, 2011 Dr. Sanjiv Agarwal New DelhiFCA, FCS, ACIS(UK)

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All India Chartered All India Chartered Accountant’s SocietyAccountant’s Society

4th Workshop on Service Tax 4th Workshop on Service Tax (Session XX II)(Session XX II)

Date: 23 July, 2011 Date: 23 July, 2011 Dr. Sanjiv AgarwalDr. Sanjiv AgarwalNew DelhiNew Delhi FCA, FCS, ACIS(UK)FCA, FCS, ACIS(UK)

Jaipur Jaipur

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This Session CoversThis Session Covers

Accommodation Services Accommodation Services w.e.f. 1 May 2011w.e.f. 1 May 2011Section 65(105) (zzzzw) Section 65(105) (zzzzw)

Restaurant Services Restaurant Services w.e.f. 1 May 2011w.e.f. 1 May 2011Section 65 (105) (zzzzv)Section 65 (105) (zzzzv)

Health Care (Medical) ServicesHealth Care (Medical) Services upto 30 April 2011upto 30 April 2011Section 65 (105) (zzzzo)Section 65 (105) (zzzzo)

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Accommodation ServicesAccommodation Services

Introduced by Finance Act, 2011Introduced by Finance Act, 2011 W.e.f. 1 May, 2011 (Notification No. 29/2011-ST dated 25.4.2011)W.e.f. 1 May, 2011 (Notification No. 29/2011-ST dated 25.4.2011) Section 65(105) (zzzzw) of Finance Act, 1994Section 65(105) (zzzzw) of Finance Act, 1994 Accommodation- Not definedAccommodation- Not defined

To provide lodging or sufficient space To provide lodging or sufficient space Room, group of rooms or buildings in which some one may live Room, group of rooms or buildings in which some one may live

or stayor stay LodgingsLodgings Available space for occupants in a building Available space for occupants in a building Some where to live; some where to stay ; lodging; housing; Some where to live; some where to stay ; lodging; housing;

room; space, place (English Dict. UK)room; space, place (English Dict. UK) Dwelling or place of temporary residence (Wikipedia)Dwelling or place of temporary residence (Wikipedia)

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Accommodation Services

Includes both residential as well as non residential purposes- Includes both residential as well as non residential purposes- Prem Prem

Narayan Barchhiha v Hakimuddin Saifi (1999) 6 SCC 381 SCNarayan Barchhiha v Hakimuddin Saifi (1999) 6 SCC 381 SC [M P [M P

Accommodation Control Act, 1961].Accommodation Control Act, 1961].

Means a building or a part of building which is used for residential or non Means a building or a part of building which is used for residential or non

residential purposes, but not as a factory or for industrial purposes- residential purposes, but not as a factory or for industrial purposes-

Sitaram Shashan v Johrimal (1972) 317 AIR AllahabadSitaram Shashan v Johrimal (1972) 317 AIR Allahabad [U P (Temporary ) [U P (Temporary )

Control of Rent and Eviction Act, 1947)]Control of Rent and Eviction Act, 1947)]

Garage, a permanent roofed structure and which is part of a building would Garage, a permanent roofed structure and which is part of a building would

come within the purview of accommodation.come within the purview of accommodation.

R.N.Gupta v Sarla Khandelwal AIR 74 Allahabad 377R.N.Gupta v Sarla Khandelwal AIR 74 Allahabad 377 [UP (Temporary) [UP (Temporary)

Control of Rent and Eviction Act, 1947)]Control of Rent and Eviction Act, 1947)]

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Accommodation ServicesAccommodation ServicesService Provider – ReceiverService Provider – Receiver

Service ReceiverService Receiver -- Any personAny person Service ProviderService Provider -- To be any of the following -To be any of the following -

HotelHotelInnInnGuest houseGuest houseClubClubCampsite Campsite

Others, by whatever name calledOthers, by whatever name called

None of the above defined in statutory provisions None of the above defined in statutory provisions Club or association defined u/s 65(25a)- Any person or body of persons Club or association defined u/s 65(25a)- Any person or body of persons

providing services, facilities or advantages primarily to its members, for a providing services, facilities or advantages primarily to its members, for a subscription or any other amount, but does not include …….subscription or any other amount, but does not include …….

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Taxable Service [Section 65(105) (zzzzw)]Taxable Service [Section 65(105) (zzzzw)]Any service provided or to be provided to any person by a Any service provided or to be provided to any person by a hotel, inn, guest house, club or campsite, by whatever name hotel, inn, guest house, club or campsite, by whatever name called, in relation to providing of accommodation for a called, in relation to providing of accommodation for a continuous period of less than three months.continuous period of less than three months.

Taxability TestsTaxability Tests Service provider Service provider AccommodationAccommodation Declared tariff Declared tariff PeriodPeriod

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Basic Ingredients of Taxable ServicesBasic Ingredients of Taxable Services accommodation services can be provided to any person accommodation services can be provided to any person service should be in relation to accommodationservice should be in relation to accommodation service should be provided by / accommodation must be at any of the service should be provided by / accommodation must be at any of the

following – following – hotel hotel Inn Inn guest house guest house club, orclub, or campsite campsite

Such places may also be known by any other name such as resort, motel, Such places may also be known by any other name such as resort, motel, service apartments etc. service apartments etc.

accommodation must be provided for a continuous period of less than accommodation must be provided for a continuous period of less than three months. three months.

accommodation for a period of three months or more are not covered in accommodation for a period of three months or more are not covered in the scope of taxable services. the scope of taxable services.

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Coverage CriteriaCoverage Criteria

Vide Notification No 31/2011-ST dated 25.4.2011, actual levy of service tax Vide Notification No 31/2011-ST dated 25.4.2011, actual levy of service tax

shall be restricted to cases where the declared accommodation tariff is of shall be restricted to cases where the declared accommodation tariff is of

Rs. 1000 per day per room or higher. Once this criteria is met, service tax Rs. 1000 per day per room or higher. Once this criteria is met, service tax

would be levied irrespective of trade or tariff discounts given to guests. would be levied irrespective of trade or tariff discounts given to guests.

Taxability not to be affected when actual amount charged from guest/ Taxability not to be affected when actual amount charged from guest/

customer is less than Rs. 1000 as service tax is levied on actual amount customer is less than Rs. 1000 as service tax is levied on actual amount

charged.charged.

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Accommodation for continuous period of three monthsAccommodation for continuous period of three months

Cases of continuous period of 3 months or more to be excluded from scope Cases of continuous period of 3 months or more to be excluded from scope

of tax Service Tax. of tax Service Tax.

‘‘Continuous stay’ is crucial Continuous stay’ is crucial

Broken period, even if more than > 3 months to be taxable. Broken period, even if more than > 3 months to be taxable.

Holiday home taken by a bank or organizations for >3 months – not Holiday home taken by a bank or organizations for >3 months – not

taxable.taxable.

Rooms used as office on monthly may rent not coveredRooms used as office on monthly may rent not covered . .

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What is declared tariff

Relevant in determining liability to pay Service Tax. Includes Charges for all amenities provided in unit of accommodation like –

• furniture • air conditioner • refrigerator • charges for all electronic gadgets installed in room

(TRU Letter dated 25.4.2011)• any other facility provided by hotel as a part of stay • cost of meals included in declared tariff.

Does not include • Any discount offered on published charges for such unit • Cost of extra bed (TRU Letter dated 25.4.2011) • Declared Tariff v. Published charges

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Valuation• Gross amount billed to guest

• Optional abatement vide Notification No. 34/2011 Service Tax dated 25.4.2011 @ 50 percent ; effective rate comes to 5 percent + cess

• Abetment to be taken if, no cenvat credit is availed on inputs and input services / Benefit of Notification No. 12/2003 not taken.

• Actual tax to be paid on amount charged ,i.e, declared tariff net of discount, eg,

Declared tariff Rs. 2000Actual charged Rs. 1500Service Tax to be charged on Rs. 1500

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Valuation Issues Clarified (Circular No 139/8/2011-TRU Dated Valuation Issues Clarified (Circular No 139/8/2011-TRU Dated 10.5.2011)10.5.2011) It is possible to levy separate tariff for the same accommodation in It is possible to levy separate tariff for the same accommodation in

respect of a class of customers which can be recognized as a distinct respect of a class of customers which can be recognized as a distinct class on an intelligible criterion. However, it is not applicable for a class on an intelligible criterion. However, it is not applicable for a single or few corporate entities. single or few corporate entities.

Where the declared tariff includes the cost of food or beverages, Service Where the declared tariff includes the cost of food or beverages, Service Tax will be charged on the total value of declared tariff. But where the Tax will be charged on the total value of declared tariff. But where the bill is separately raised for food or beverages, and the amount is charged bill is separately raised for food or beverages, and the amount is charged in the bill, such amount is not considered as part of declared tariff.in the bill, such amount is not considered as part of declared tariff.

When the declared tariff is revised as per the tourist season, the liability When the declared tariff is revised as per the tourist season, the liability to pay Service Tax shall be only on the declared tariff for the to pay Service Tax shall be only on the declared tariff for the accommodation where the published/printed tariff is above Rupees accommodation where the published/printed tariff is above Rupees 1000/-. However, the revision in tariff should be made uniformly 1000/-. However, the revision in tariff should be made uniformly applicable to all customers and declared when such change takes place. applicable to all customers and declared when such change takes place.

For the purpose of service tax, luxury tax has to be excluded from the For the purpose of service tax, luxury tax has to be excluded from the taxable value (or declared tariff).taxable value (or declared tariff).

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Per Kerala High Court Order dated 16.6.2011 in W.P. ( C) No 14054/2011 (E)Per Kerala High Court Order dated 16.6.2011 in W.P. ( C) No 14054/2011 (E)

Kerala Classified Hotels and Resorts Association & Others v Union of India & Kerala Classified Hotels and Resorts Association & Others v Union of India &

OthersOthers

• Admitted Interim stay against any coercive steps of recovery of service Admitted Interim stay against any coercive steps of recovery of service

tax or against any proceedings for imposing penalty for a period of two tax or against any proceedings for imposing penalty for a period of two

months in relation to following taxable services-months in relation to following taxable services-

• Accommodation Services (zzzzw)Accommodation Services (zzzzw)

• Restaurant Services (zzzzvRestaurant Services (zzzzv))

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Export /Import of Service for Accommodation / RestaurantExport /Import of Service for Accommodation / RestaurantServicesServices

Export Export

Service provided in relation to immovable property situated outside IndiaService provided in relation to immovable property situated outside India

Import Import

Service provided by person from out side India in relation to immovable Service provided by person from out side India in relation to immovable property situated in Indiaproperty situated in India

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Person LiablePerson Liable

Any hotel, guest house, club etc providing Any hotel, guest house, club etc providing accommodation services for short term to guests are accommodation services for short term to guests are

liable to pay service taxliable to pay service tax..

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Restaurant ServicesRestaurant Services

Introduced by Finance Act, 2011Introduced by Finance Act, 2011

W.e.f. 1 May 2011 (Notification No. 29/2011-ST dated W.e.f. 1 May 2011 (Notification No. 29/2011-ST dated

25.4.2011)25.4.2011)

Section 65(105) (zzzzv) of Finance Act, 1994Section 65(105) (zzzzv) of Finance Act, 1994

Gross amount charged by the restaurants to customer shall Gross amount charged by the restaurants to customer shall

be charged to service tax, subject to abatements/ be charged to service tax, subject to abatements/

exemptions.exemptions.

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Restaurant ServicesRestaurant Services

Not defined in statutory provisionsNot defined in statutory provisions Literal meaning - a place where people sit and eat meals that are Literal meaning - a place where people sit and eat meals that are

cooked and served on premisescooked and served on premises Restaurant means premises in which is carried on principally or Restaurant means premises in which is carried on principally or

wholly the business of supplying meals or refreshments to the public wholly the business of supplying meals or refreshments to the public or a class of the public for consumption on the premises but does not or a class of the public for consumption on the premises but does not include a restaurant attached to a theatre. [Weekly Holidays Act,1942]include a restaurant attached to a theatre. [Weekly Holidays Act,1942]

Restaurant means any premises, not being a restaurant situated in a Restaurant means any premises, not being a restaurant situated in a hotel in which the business of sale of food or drink to the public is hotel in which the business of sale of food or drink to the public is carried on and such premises, at the beginning of any month, are carried on and such premises, at the beginning of any month, are equipped with, or have access to, facilities for air conditioning. equipped with, or have access to, facilities for air conditioning. [Expenditure Tax Act, 1987].[Expenditure Tax Act, 1987].

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Restaurant ServicesRestaurant Services FoodFood – Any substance / material consumed to provide nutritional support – Any substance / material consumed to provide nutritional support

for the body or for pleasure (Wikipedia) for the body or for pleasure (Wikipedia)

Nourishing substance that is eaten, drunk or otherwise taken into body to Nourishing substance that is eaten, drunk or otherwise taken into body to

sustain life, provide energy, promote growth; more or less solid sustain life, provide energy, promote growth; more or less solid

nourishment distinct from liquid (American Heritage Dictionary). nourishment distinct from liquid (American Heritage Dictionary).

BeverageBeverage – A drink or beverage is a liquid which is specifically prepared – A drink or beverage is a liquid which is specifically prepared

for human consumption, fills basic human need, forms part of culture of for human consumption, fills basic human need, forms part of culture of

human society (Wikipedia). human society (Wikipedia).

Alcoholic beverageAlcoholic beverage – A drink containing ethanol (alcohol) – beer, wine, – A drink containing ethanol (alcohol) – beer, wine,

spirits; legally consumed world over subject to restrictions.spirits; legally consumed world over subject to restrictions.

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Restaurant Services

Taxable Service [65(105) (zzzzv)]

Any service provided or to be provided to any person, by a restaurant, by whatever name called, having the facility of air-conditioning in any part of the establishment, at any time during the financial year, which has licence to serve alcoholic beverages, in relation to serving of food or beverage, including alcoholic beverages or both, in its premises.

Tests for Taxability for Service Provider• Restaurant • Air Conditioning • License to serve alcoholic beverages

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Restaurant Services

Legislative IntentThe new levy is directed at services provided by high-end restaurants that are air conditioned and have license to serve liquor. Such restaurants provide conditions and ambience in a manner that service provided may assume predominance over the food in many situations. It should not be confused with mere sale of food at any eating house, where such services are materially absent or so minimal that it will be difficult to establish that any service in any meaningful way is being provided. (TRU Letter dated 28.2.2011)

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Restaurant Services

Essential Features for Taxability

Taxable services should have following essential features-

a) services shall be provided by a restaurant or any establishment rendering such service and called by whatever name (say, a club, a pub, eating joint fulfilling criteria, coffee houses etc)

b) service can be provided to any person

c) restaurant should have a facility of air conditioning in whole or any part of the restaurant during any time during the financial year .

d) restaurant should have licence to serve alcoholic beverages, whether actually serving such beverages or not.

e) eligible restaurants providing services in relation to serving food or beverages including alcoholic beverage, or both in its premises shall be liable to service tax.

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Restaurant Services

Air Conditioning Air Conditioning

Whole or any part of the restaurant to be air conditioned Whole or any part of the restaurant to be air conditioned In case of partial air conditioning – Service Tax applicable on whole of In case of partial air conditioning – Service Tax applicable on whole of

restaurant / services.restaurant / services. Not necessary that facility of air conditioning is available round the year. It Not necessary that facility of air conditioning is available round the year. It

can be for at any time during the year after 1.5.2011can be for at any time during the year after 1.5.2011..

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Restaurant Services

Following Activities / Services are out of Service Tax net Following Activities / Services are out of Service Tax net

Amount paid by customer ex gratia (tip to staff member)Amount paid by customer ex gratia (tip to staff member) Room service Room service Sole of goods at MRP Sole of goods at MRP Service from non AC / non alcohol licensed restaurants Service from non AC / non alcohol licensed restaurants Services from / at outside restaurant premises (if cost centre / Services from / at outside restaurant premises (if cost centre /

profit centre is separate). profit centre is separate).

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Restaurant Services

CBEC Clarifications (Circular No. 139/8/2011-TRU dated 10.5.2011)CBEC Clarifications (Circular No. 139/8/2011-TRU dated 10.5.2011)

Service Tax is leviable on the service provide by a restaurant which satisfies two conditions: Service Tax is leviable on the service provide by a restaurant which satisfies two conditions: (i) it should have the facility of air conditioning in any part of the establishment and (ii) it (i) it should have the facility of air conditioning in any part of the establishment and (ii) it should have license to serve alcoholic beverages. Within the same entity, if there are more should have license to serve alcoholic beverages. Within the same entity, if there are more than one restaurant, which are clearly demarcated and separately named, the ones which than one restaurant, which are clearly demarcated and separately named, the ones which satisfy both the criteria is only liable to service tax. satisfy both the criteria is only liable to service tax.

The taxable services provided by a restaurant in other parts of the hotel e.g. swimming pool, or The taxable services provided by a restaurant in other parts of the hotel e.g. swimming pool, or an open area attached to the restaurant are also liable to Service Tax as these areas become an open area attached to the restaurant are also liable to Service Tax as these areas become extensions of the restaurant. extensions of the restaurant.

When the food is served in the room, service tax cannot be charged under the restaurant When the food is served in the room, service tax cannot be charged under the restaurant service as the service is not provided in the premises of the air-conditioned restaurant with a service as the service is not provided in the premises of the air-conditioned restaurant with a licence to serve liquor. Also, the same cannot be charged under the Short Term licence to serve liquor. Also, the same cannot be charged under the Short Term Accommodation head if the bill for the food will be raised separately and it does not form part Accommodation head if the bill for the food will be raised separately and it does not form part of the declared tariff. of the declared tariff.

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Restaurant Services

ValuationValuation Following exclusions from value allowed –Following exclusions from value allowed –

Service charges meant for staff performance (tips)Service charges meant for staff performance (tips) State value added tax State value added tax Other statutory taxes / duties Other statutory taxes / duties Counter sale of goods Counter sale of goods Home delivery charges Home delivery charges

Abatement @ 70 percent from gross value including service charges, if no Abatement @ 70 percent from gross value including service charges, if no cenvat credit on inputs/ input services availed and benefit of Notification cenvat credit on inputs/ input services availed and benefit of Notification No 12/2003 not taken (Notification No. 34/2011-ST dated 25.4.2011) No 12/2003 not taken (Notification No. 34/2011-ST dated 25.4.2011)

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Health (Medical) ServicesHealth (Medical) Services

Introduced by Finance Act 2010 w.e.f. 1.7.2010 [Section 65 (105) Introduced by Finance Act 2010 w.e.f. 1.7.2010 [Section 65 (105) (zzzzo)](zzzzo)]

Vide Notification No. 24/2010-ST dated 22.6.2010Vide Notification No. 24/2010-ST dated 22.6.2010 Withdrawn by Finance Act, 2011Withdrawn by Finance Act, 2011 Exempted w.e.f. 1.5.2011 vide Notification No 30/2011-ST dated Exempted w.e.f. 1.5.2011 vide Notification No 30/2011-ST dated

25.4.201125.4.2011

Coverage into tax netCoverage into tax net Finance Act, 2010 had introduced the levy of service tax on the Finance Act, 2010 had introduced the levy of service tax on the

following health services-following health serviceshealth check up undertaken by hospitals or medical establishment for the health check up undertaken by hospitals or medical establishment for the

employees of business entities (corporate health checkup)employees of business entities (corporate health checkup) health service provided under health insurance schemes offered by insurance health service provided under health insurance schemes offered by insurance

companies.companies.

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Business Entity [65(19b)]Business Entity [65(19b)]

Business entity would include any -Business entity would include any - association of personsassociation of persons body of individuals body of individuals company, orcompany, or firm firm Individuals excluded from the scope of business entity.Individuals excluded from the scope of business entity. Definition of taxable service cover the employees of Definition of taxable service cover the employees of

business entity who makes the payment of taxable services.business entity who makes the payment of taxable services.

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Taxable Service [Section 65(103) (zzzzo) [prior to 1.5.2011]Taxable Service [Section 65(103) (zzzzo) [prior to 1.5.2011] Any services provided or to be provided by any hospital, Any services provided or to be provided by any hospital,

nursing home or multi-specialty clinic,—nursing home or multi-specialty clinic,—• to an employee of any business entity, in relation to health to an employee of any business entity, in relation to health

check-up or preventive care, where the payment for such check-up or preventive care, where the payment for such check-up or preventive care is made by such business entity check-up or preventive care is made by such business entity directly to such hospital, nursing home or multi-specialty directly to such hospital, nursing home or multi-specialty clinic; orclinic; or

• to a person covered by health insurance scheme, for any to a person covered by health insurance scheme, for any health check-up or treatment, where the payment for such health check-up or treatment, where the payment for such health check-up or treatment is made by the insurance health check-up or treatment is made by the insurance company directly to such hospitalcompany directly to such hospital, nursing , nursing home or multi-home or multi-specialty clinic.specialty clinic.

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Essential Conditions for TaxabilityEssential Conditions for Taxability

Services shall be provided by any -Services shall be provided by any -• hospital, orhospital, or• nursing home, ornursing home, or• multi specialty clinicmulti specialty clinic

Services should be provided to Services should be provided to • employees of a business entities, or employees of a business entities, or • to a person covered by health insurance scheme.to a person covered by health insurance scheme.

In case of service to employees, service may be in relation to health In case of service to employees, service may be in relation to health check up / preventive care.check up / preventive care.

In case of persons covered under insurance scheme, service may be in In case of persons covered under insurance scheme, service may be in relation to health checkup / treatmentrelation to health checkup / treatment

Payment shall be made – Payment shall be made – • employer being business entity employer being business entity • by directly insurance company, butby directly insurance company, but• not by employee or insured person.not by employee or insured person.

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Scope of ServicesScope of Services corporate health check up schemescorporate health check up schemes medi -claim insurance policies (cash less polices)medi -claim insurance policies (cash less polices) regular check up of employees such as in hotels/ airlines/ IT regular check up of employees such as in hotels/ airlines/ IT

industry etc.industry etc. health / medical perquisites by employers such as for health / medical perquisites by employers such as for

employees wherein employees bears the costemployees wherein employees bears the cost..

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Services when not taxableServices when not taxable

The service shall not be taxable in the following circumstances-The service shall not be taxable in the following circumstances- service provider is not a hospital, nursing home or multi service provider is not a hospital, nursing home or multi

specialty clinic.specialty clinic. service provider is an individual doctor or an in-house doctor service provider is an individual doctor or an in-house doctor service provider is a hospital belonging to same business service provider is a hospital belonging to same business

entity whose employee is being provided serviceentity whose employee is being provided service preventive care in case of insured personpreventive care in case of insured person Payment made by the patient or individuals Payment made by the patient or individuals Payment made by the insured person and later reimbursed by Payment made by the insured person and later reimbursed by

the insurance companythe insurance company

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Amendments made by Finance Act, 2011 Amendments made by Finance Act, 2011 Clinical Establishment (Section 65(25a)]Clinical Establishment (Section 65(25a)]Clinical establishment means Clinical establishment means a hospital, maternity home, nursing home, dispensary, clinic, sanatorium or an institution, by a hospital, maternity home, nursing home, dispensary, clinic, sanatorium or an institution, by

whatever name called, owned, established, administered or managed by any person or, body whatever name called, owned, established, administered or managed by any person or, body of persons, whether incorporated or not, having in its establishment the facility of central air-of persons, whether incorporated or not, having in its establishment the facility of central air-conditioning either in whole or in part of its premises and having more than twenty-five beds conditioning either in whole or in part of its premises and having more than twenty-five beds for in-patient treatment at any time during the financial year, offering services for diagnosis, for in-patient treatment at any time during the financial year, offering services for diagnosis, treatment ,pr care for illness, disease, injury, deformity, abnormality, or pregnancy in any treatment ,pr care for illness, disease, injury, deformity, abnormality, or pregnancy in any system of medicine; orsystem of medicine; or

an entity owned, established, administered or managed by any person or body of persons, an entity owned, established, administered or managed by any person or body of persons, whether incorporated or not, either as an independent entity or as a part of any; clinical whether incorporated or not, either as an independent entity or as a part of any; clinical establishment referred to in sub-clause (I), which carries out diagnosis of diseases through establishment referred to in sub-clause (I), which carries out diagnosis of diseases through pathological, bacteriological, genetic, radiological, chemical, biological investigations or other pathological, bacteriological, genetic, radiological, chemical, biological investigations or other diagnostic or investigative services with the aid of laboratory or other medical equipment, diagnostic or investigative services with the aid of laboratory or other medical equipment, But does not include an establishment, owned or controlled by – But does not include an establishment, owned or controlled by –

the Government; or the Government; or a local authority; a local authority;

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Taxable Service [Section 65 (105) (zzzzo)] Taxable Service [Section 65 (105) (zzzzo)] Services provided or to be provided to any person, - Services provided or to be provided to any person, - by a clinical establishment; or by a clinical establishment; or by a doctor, not being an employee of a clinical establishment, who by a doctor, not being an employee of a clinical establishment, who

provides services from such premises for diagnosis, treatment or care provides services from such premises for diagnosis, treatment or care for illness, disease, injury, deformity, abnormality or pregnancy in any for illness, disease, injury, deformity, abnormality or pregnancy in any system of medicine;system of medicine;

Taxable services include-Taxable services include- Any service provided by a clinical establishment having the facility of Any service provided by a clinical establishment having the facility of

central air conditioning in any part of the establishment and more than central air conditioning in any part of the establishment and more than 25 beds for in-patient treatment at any time of the year;25 beds for in-patient treatment at any time of the year;

Diagnostic services provided by a clinical establishment with the aid of Diagnostic services provided by a clinical establishment with the aid of laboratory or medical equipment; andlaboratory or medical equipment; and

Health-related services provided by doctors, not being employees, Health-related services provided by doctors, not being employees, providing health-related services from the premises of a clinical providing health-related services from the premises of a clinical establishment.establishment.

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Withdrawal/ specific Exemption Withdrawal/ specific Exemption Taxable services provided under clause (zzzzo) shall Taxable services provided under clause (zzzzo) shall

be exempt from whole of Service tax w.e.f. 1.5.2011 be exempt from whole of Service tax w.e.f. 1.5.2011 vide Notification No. 30/2011 – ST dated 25.4.2011. vide Notification No. 30/2011 – ST dated 25.4.2011.

Service tax not applicable on health (medical ) Service tax not applicable on health (medical ) services w.e.f. 1.5.2011, not even to services covered services w.e.f. 1.5.2011, not even to services covered under pre Finance Act, 2011 provisionsunder pre Finance Act, 2011 provisions

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Legal Position after exemption Legal Position after exemption Old provisions of clause zzzzo hold good till 7.4.2011 only as Old provisions of clause zzzzo hold good till 7.4.2011 only as

from 8.4.2011, Finance Act, 2011 was enacted and clause from 8.4.2011, Finance Act, 2011 was enacted and clause zzzzo substituted.zzzzo substituted.

But amended definition is effective from 1.5.2011But amended definition is effective from 1.5.2011 Between 8.4.2011 and 30.4.2011 (both dates included), there Between 8.4.2011 and 30.4.2011 (both dates included), there

is no taxable service as such under clause zzzzo.is no taxable service as such under clause zzzzo. W.e.f. 1.5.2011, services under clause zzzzo are fully exempt W.e.f. 1.5.2011, services under clause zzzzo are fully exempt

vide Notification 30/2011-ST dated 25.4.2011vide Notification 30/2011-ST dated 25.4.2011 Will old definition continue till 30.4.2011 – No. Will old definition continue till 30.4.2011 – No.

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THANK YOU FOR

YOUR PRECIOUS TIME

AND ATTENTION

Dr. Sanjiv AgarwalFCA, FCS, Jaipur

[email protected]@gmail.com

Documents

1 All India Chartered Accountants Society 4th Workshop on Service Tax (Session XX II) Date: 23 July, 2011 Dr. Sanjiv Agarwal New DelhiFCA, FCS, ACIS(UK)