MANU/PIBU/0378/2016

Department/Board : Press Information Bureau

Date : 14.04.2016

Notification/ Circulars Referred : Circular No. 192/02/2016-Service Tax dated 13 April 2016 MANU/DSTX/0028/2016;Circular No. 89/7/2006-Service Tax dated 18-12-2006 MANU/DSTX/0059/2006;Circular No. 96/7/2007-ST dated 23.8.2007 MANU/DSTX/0072/2007

Citing Reference:
Circular No. 192/02/2016-Service Tax dated 13 April 2016 MANU/DSTX/0028/2016  Referred

Circular No. 89/7/2006-Service Tax dated 18-12-2006 MANU/DSTX/0059/2006  Referred

Circular No. 96/7/2007-ST dated 23.8.2007 MANU/DSTX/0072/2007  Referred

Clarifications regarding Services Provided by Government or Local Authority; Any Service Provided by the Government or a Local Authority to a Business Entity has been Made Taxable with Effect from 1st April 2016

Any service provided by the Government or a local authority to a business entity has been made taxable with effect from 1st April 2016. Prior to this, only support services provided by Government or local authority to business entities were taxable. In order to clarify doubts raised by members of Industry and Trade Associations and mitigate the small assessees from compliance burden, a detailed Circular No. 192/02/2016-Service Tax dated 13 April 2016 has been issued. The Circular addressed to the field formations of the Central Board of Excise and Customs (CBEC) explains in a Q&A form the various provisions of the notifications issued in this regard.

It may be recalled that services provided by Government or a local authority to business entities up to a turnover of Rs 10 lakh in the preceding financial year have been exempted. This would relieve small businesses from compliance burden.

In this background, the salient features of the Circular are as under:-

Services provided by Government or a local authority to another Government or a local authority have been exempted. However, this exemption is not applicable to services provided by Government or a local authority which were subjected to service tax prior to 1st April 2016 (for instance, the services of transport of goods or passengers by Indian Railways).

Services by way of grant of passport, visa, driving license, birth or death certificates have been exempted. Further, services provided by Government or a local authority where the gross amount charged for such service does not exceed Rs 5000/- have been exempted. In case of continuous service, the exemption shall be applicable where the gross amount charged for such ........