SERVICE TAX TERMINOLOGY – PART IV

[Dr. Sanjiv Agarwal]

Amusement facility

(Clause 9 of section 65B as inserted by Finance Bill, 2012)

"amusement facility" means a facility where fun or recreation is provided by means of rides, gaming devices or bowling alleys in amusement parks, amusement arcades, water parks, theme parks or such other places but does not include a place within such facility where other services are provided;

Amusement means entertainment, diversion, pastime, sport etc.

'The words "entertainments" and "amusements" are wide enough to include theatres, dramatic performances, cinemas, sports and the like. rv. Srinivasamurthy v. State of Mysore, AIR 1959 SC 894, 896. [Mysore Cinematograph Shows Tax Act, 1951, S. 3; Constitution of India, Sch. VII, List II, Entries 62, 33; List I, Entry 60]

'Toys and games...for amusements" (Finance Act, 1948 (c. 49), s. 20, sched. 8, group 20) includes construction kits for making model aircraft and ships, which are nevertheless "amusements" even though some people may take them very seriously. (Commissioners of Customs and Excise v. E. Keil & Co., (1951) KB 469).

  Amusement would mean diversion, pastime or enjoyment or a pleasurable occupation of the senses, or that which furnished it. M.J. Sivani v. State of Karnataka. AIR 1995 SC ] 770, ] 772.

Assessee (Clause 12 of section 65B as inserted by Finance Bill, 2012)

Assessee means a person liable to pay tax and includes his agent. Prior to Finance Act, 2012 amendment, section 65(7) defined ‘assessee’ with similar definition with the difference that the words ‘service tax’ have now been substituted by the word ‘tax’.

Accordingly, assessee would be any ‘person’ as defined in section 65B (37) who is liable to pay tax under the provisions of Finance Act, 1994. Assessee also includes agent of such persons. Thus, persons paying Service Tax under reverse charge basis shall also be considered as assessee.

Section 2(7) of Income Tax Act, 1961 defines assessee as under –

'Assessee' means a person by whom any tax or any other sum of money is payable under the Act and includes -

(a)    Every person in respect of whom any proceeding under this Act has been taken for the assessment of his income or assessment of fringe benefits or of the income of any other person in respect of which he is assessable or of the loss sustained by him or by such other person, or of the amount of refund due to him or to such other person

(b)    Every person who is deemed to be an assessee under any provisions of this Act

(c)    Every person who is deemed to be an assessee in default under any provisions of this Act .

“Assessee” means the person who is liable to pay the duty of excise under this Act and includes his agent [Central Excise Act 1944, S. 4(3) (a) S. 2 (5)].

Assessee primarily means a person the amount of whose income is computed under the provisions of the Act. Every person who is liable to pay the tax, whether the tax is payable in respect of his own income or whether it is payable in respect of another person’s income is an assessee for the purposes of the Act. SRE B. Shah Mahmood v. Asst. Commissioner, (1963) 47 ITR, 55, 61 (Mysore). [Income Tax Act,  1961, S.2 (7)].

The word “assessee” refers to the person whose income profits or gains in respect of a particular source had been once assessed to tax. Commissioner of Income Tax v. Kanchanbai, AIR 1969 -TMI - 6190 – (SUPREME Court) [Income Tax Act 1922, S. 2 (11)(i) (a)].  

Business Entity (Clause 17 of section 65B as inserted by Finance Bill, 2012)

"business entity" means any person ordinarily carrying out any activity relating to

industry, commerce or any other business;

Earlier, business entity was defined in section 65 (19b) as an inclusive definition to include an association of persons, body of individuals, company or firm but does not include an individual.

Thus, under the new definition, business entity would mean any persons including individual who carries out any of the following activities in ordinary course –

a)      industry,

b)      commerce,

c)      any other business

 

= = = = = = =