SERVICE TAX ON OPINION POLL SERVICES

[Dr. Sanjiv Agarwal]

Service tax has been imposed on opinion poll services rendered by any opinion poll agency by the Finance Act, 2004 with effect from 10th September, 2004. The gross amount charged to any person in relation to opinion poll services is chargeable to service tax, i.e. services provided by opinion poll agency to any person. Services provided by an opinion poll agency (i.e., any person providing that service) in relation to opinion polls are taxable under this category.

Meaning of Opinion Poll

Section 65(75a ) of Finance Act 1994 defines 'opinion poll' as under -

"opinion poll" means any service designed to secure information on public opinion regarding social, economic, political or other issues.

 

CBEC has clarified vide Circular No. 80 dated 17-9-2004 that opinion poll means securing information on public opinions regarding social, economic, political and other issues. The term 'securing' would include activities like selecting the target groups, preparing questionnaires, gathering opinions from such target groups, collating their responses, drawing conclusions or analysing trends and preparing reports based thereon. A similar service i.e., 'market research agency service' is taxable since 1998. However, that service includes conducting of market research in relation to products, services and utilities.

The definition of opinion poll should satisfy the following tests -

(a)   opinion poll is a service designed to secure or obtain information

(b)   information should be based on the public opinion or poll

(c)   information/opinion must be regarding any —

  (i)  social issue,

(ii)  economic issue,

( iii)  political issue, or

(iv)  other issues

 

Meaning of Opinion Poll Agency

Section 65(77b) of Finance Act,1994 defines 'opinion poll agency' as under—

"opinion poll agency" means any person engaged in providing any service in relation to opinion poll".

Accordingly, an opinion poll agency should be a specific agency which could be any person (i.e. individual, firm, company or other commercial concern). Such agency should be engaged in providing any type of service in relation to opinion polls.

Thus, an opinion poll agency —

(a)   should be any person

(b)   should be engaged in providing any service

(c)   such service should relate to opinion polls

Taxable Service

Section 65(105)(zzs) of Finance Act, 1994 defines taxable service as under —

"any service provided or to be provided to any person, by any opinion poll agency, in relation to opinion poll".

Opinion poll services are taxable when provided to any person in relation to opinion poll by any opinion poll agency.

Thus, following three basic conditions must be satisfied for taxability of opinion poll services -

(a)   service must be provided (includes services to be provided) to any person.

(b)   service must relate to opinion poll and may be any service.

(c)   service must be provided by a person who is an opinion poll agency.

 

Value of Taxable Service

In the event of opinion poll agency undertaking an assignment for opinion poll without any consideration, the value of taxable service will be nil. Similarly, in-house opinion polls conducted through own staff or polls conducted for academic research by students or research scholars will have no taxable value.

Person Liable

Opinion poll agency conducting the opinion poll shall be liable to pay service tax and shall be treated as an assessee for service tax purposes.