SERVICE TAX TERMINOLOGY PART – IX

[Dr. Sanjiv Agarwal]

SUPPORT SERVICES

 

Support services (Clause 49 of section 65 B)

"support services" means infrastructural, operational, administrative, logistic, marketing or any other support of any kind comprising functions that entities carry out in ordinary course of operations themselves but may obtain as services by outsourcing from others for any reason whatsoever and shall include advertisement and promotion, construction or works contract, renting of immovable property, security, testing and analysis.

Support services have been defined in section 65B of the Act as ‘infrastructural, operational, administrative, logistic marketing or any other support of any kind comprising functions that entities carry out in ordinary course of operations themselves but may obtain as services by outsourcing from others for any reason whatsoever and shall include advertisement and promotion, construction or works contract, renting of movable or immovable property, security, testing and analysis’. Thus services which are provided by government in terms of their sovereign right to business entities are not support services e.g. grant of mining or licensing rights.

‘Support services for business or commerce’ was prior to Finance  Act 2012, defined in section 65(104c) as follows –

“Support services of business or commerce means services provided in relation to business or commerce and includes evaluation of prospective customers, telemarketing, processing of purchase orders and fulfilment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, operational or administrative assistance in any manner, formulation of customer service and pricing policies, infrastructural support services and other transaction processing”.

The new definition is a wider definition and generally includes the following –

• advertising
• sales promotion / other promotion
• construction
• works contract
• renting of immovable property
• security
• testing and analysis

 

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