2008 (1) TMI 73 - AT - Service Tax

Tax on Chartered Accountants who are carrying on the activity of billing - Appellants contend that this is clerical activity which is not done by professionals but it is done by staff who have not even passed SSLC. It is a mere billing activity & such type of contracts are given to others also who are not CAs - issue has already been decided by this Bench in large number of appeals of CAs wherein it has been held that the activity carried out by ordinary clerks is not part of the CAs activity

Summary

Issues: Confirmation of service tax on Chartered Accountants for billing activity under the category of practicing CAs.

Analysis:
1. The appeals arose from orders confirming service tax on Chartered Accountants for billing activity under contracts with APCPDCL/AP Transco. The Appellants argued that billing was a clerical activity not exclusive to professionals and could be done by staff without professional qualifications. They cited a previous case where the Tribunal upheld that billing was not part of practicing CAs' activities.

2. The department maintained that the activity by CAs for APCPDCL/AP Transco fell under practicing CAs' domain. However, the Appellants' position was that the activity was merely billing and not exclusive to Chartered Accountants.

3. The Member (J) noted that previous decisions by the Bench established that billing, even when done by clerks without professional qualifications, did not constitute practicing CAs' activities. Referring to the case of CCE v. Umakanth & Co., the Member held that the impugned order was not legally sound. Consequently, the order confirming service tax on the Chartered Accountants was set aside, allowing the appeal with any necessary relief.

This judgment clarifies that billing activities performed by Chartered Accountants may not necessarily fall under the category of practicing CAs, especially when similar tasks can be carried out by non-professionals. The decision emphasizes the importance of considering the specific nature of the activity in question when determining the applicability of tax regulations to professional services.