DECLARED SERVICES & GST
By: – DR.MARIAPPAN GOVINDARAJAN
Service Tax
Dated:- 22-11-2016
The Finance Act, 1994 covers nearly 120 services in the service tax net up to the year 2012 during which negative list was introduced. As such all services except the services in the negative list and in the mega exemption list are liable for the levy of service tax. However, there are certain activities which are difficult to determine whether such activities would be classified as a service or not. Therefore the Government while introducing the negative list inserted a section in which certain services are declared as 'declared services'. It is the deeming fiction of law. It provides the lawmakers to declare any service as 'declared service'.
Section 65B(22) of the Finance Act,1994 defines the term 'declared service' as any activity carried out by a person for another person for consideration and declared as such under Section 66E.
Section 66E provides that the following shall co
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the expression "construction" includes additions, alterations, replacements or remodeling of any existing civil structure;
(c) temporary transfer or permitting the use or enjoyment of any intellectual property right;
* development, design, programming, customization, adaptation, up gradation, enhancement, implementation of information technology software;
* agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act;
* transfer of goods by way of hiring, leasing, licensing or in any such manner without transfer of right to use such goods;
* activities in relation to delivery of goods on hire purchase or any system of payment by installments;
* service portion in the execution of a works contract;
* service portion in an activity wherein goods, being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity;
* assignment by the Governm
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nsideration and whether or not in the course of furtherance of business; and
* a supply specified in Schedule I, made or agreed to be made without a consideration;
Section 3(2) provides that Schedules in respect of matters mentioned therein, shall apply for determining what is, or is to be treated as a supply of goods or a supply of services.
In Schedule II of Model GST Act, 2016, almost all the declared services in Section 66E of the Finance Act are found place, except the following-
* transfer of goods by way of hiring, leasing, licensing or in any such manner without transfer of right to use such goods;
* assignment by the Government of the right to use the radio-frequency spectrum and subsequent transfers thereof.(introduced with effect from 14.05.2016).
Point 5 in Schedule II provides that the following shall be treated as 'supply of service'-
* renting of immovable property;
* construction of a complex, building, civil structure or a part thereof, including a complex
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re;
(c) temporary transfer or permitting the use or employment of any intellectual property right;
* development, design, programming, customization, adaptation, up gradation, enhancement, implementation of information technology services;
* agreeing to the obligation to refrain from an act, or to tolerate an act or a situation or to do an act;
* works contract including transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract;
* transfer of right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration; and
* supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption) where such supply or service is for cash, deferred payment or other valuable consideration.
Scholarly articles for knowledge
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