MISCELLANEOUS EXEMPTIONS UNDER SERVICE TAX - PART I

[Dr. Sanjiv Agarwal]

(Vide Notification No. 25/2012-ST)

Dr. Sanjiv Agarwal 

Services by a Veterinary Clinic in Relation to Health Care of Animals or Birds

While health care services in relation to human being is covered under (2) above, the health care services for animals and birds are exempt under this category. Such services are generally provided by a veterinary clinic. The word ‘veterinary’ implies relating to the diseases, injuries and treatment of farm and domestic animals. 

Services by a Person by way of Renting of Precincts of a Religious Place meant for General Public or Conduct of any Religious Ceremony

Services provided by a person in relation to religious ceremony by way of following shall be exempt from service tax— 

(a) renting of precincts of a religious place meant for general public, or

(b) conduct of any religious ceremony 

Religious place is a place which is primarily meant for conduct of prayers or worship pertaining to a religion. 

Renting has been defined in section 65B(41) as ‘‘allowing, permitting or granting access, entry, occupation, usage or any such facility, wholly or partly, in an immovable property, with or without the transfer of possession or control of the said immovable property and includes letting, leasing, licensing or other similar arrangements in respect of immovable property’. 

‘Precincts’ means an area within the walls or perceived boundaries of a particular building or place; an enclosed or clearly defined area of ground around a cathedral, church, temple, college etc.

Exemption is available only if the place is meant for general public. General public is also defined in the mega notification 25/2012-ST as the body of people at large sufficiently defined by some common quality of public or impersonal nature. 

Conduct of religious ceremonies is exempt under Sr. No. 4 of mega exemption. Religious ceremonies are life-cycle rituals including special religious poojas conducted in terms of religious texts by a person so authorized by such religious texts. Occasions like birth, marriage, and death involve elaborate religious ceremonies. 

Renting of precinct of a religious place as well as conduct of any religious ceremony, both shall be exempt. For example, if a marriage is performed in precincts of a church by renting of that place, it would be exempt. In certain decided cases, tribunals have held that marriage is a religious function. 

Technical Testing and Analysis of Drugs etc.

Services by way of technical testing or analysis of newly developed drugs including vaccines and herbal remedies, on human participants by a clinical research organization approved to conduct clinical trials by the Drug Controller General of India are exempt from levy of service tax.

To qualify for exemption, all the following conditions should be satisfied – 

a)    service of conduct of technical testing and analysis

b)    service in relation to newly developed drugs/vaccines/herbal remedies

c)    service on human participants

d)    service by clinical research organization approved by Drug Controller General of India. 

Training or Coaching in Recreational Activities

Services by way of training or coaching in recreational activities relating to arts, culture or sports are exempt from levy of service tax The exemption is to training or coaching. Such coaching or training must relate to any one or more of —

(a) arts, or

(b) culture, or

(c) sports 

There is exemption from service tax to training or coaching in recreational activities relating to arts, culture or sports. The benefit is available to coaching or training relating to all forms of dance, music, painting, sculpture making, theatre and sports etc. However, activities by performing artists in folk or classical art forms of music, dance or theatre are not liable to service tax. taxmanagementindia.com

Services to Recognized Sports Bodies

Under this entry, following services are exempt from levy of service tax – 

Services provided to a recognised sports body by—

a)    an individual as a player, referee, umpire, coach or manager for participation in a sports event organized by a recognized sports body;

b)    another recognised sports body; 

“Recognized sports body” means

(i) the Indian Olympic Association,

(ii) Sports Authority of India,

(iii) a national sports federation recognised by the Ministry of Sports and Youth Affairs of the Central Government, and its affiliate federations,

(iv) National Sports Promotion Organisations recognised by the Ministry of Sports and Youth Affairs of the Central Government,

(v) the International Olympic Association or a federation recognized by the International Olympic Association or

(vi) a federation or a body which regulates a sport at international level.

Services provided to a recognized sports body by an individual as a player, referee, umpire, coach or manager for participation in a event (tournament or championship) organized by a recognized sports body are exempt from service tax. Similarly services by a recognized sports body to another are exempt. Services by individuals such as selectors, commentators, curators, technical experts etc are taxable.

The service of a player to a franchisee which is not a recognized sports body is taxable. However, services of an individual as umpire, referee when provided directly to a recognized sports body shall be exempt. 

Sponsorship of Tournaments or Championships

Following services shall be exempt from levy of service tax— 

Services by way of sponsorship of sporting events organised -

a) by a national sports federation, or its affiliated federations, where the participating teams or individuals represent any district, State or zone;

b) by Association of Indian Universities, Inter-University Sports Board, School Games Federation of India, All India Sports Council for the Deaf, Paralympic Committee of India, Special Olympics Bharat;

c) by Central Civil Services Cultural and Sports Board;

d) as part of national games, by Indian Olympic Association; or

e)  under Panchayat Yuva Kreeda Aur Khel Abhiyaan (PYKKA) Scheme; 

Such an exemption was also available earlier vide Notification No. 30/2010- ST dated 22.6.2010 

Both, sponsorship and sports have not been defined in the Act. Earlier, sponsorship was defined under section 65 (99 a). Accordingly, Sponsorship included naming an event after the sponsor, displaying the sponsor’s company logo or trading name, giving the sponsor exclusive or priority booking rights, sponsoring prizes or trophies for competition; but does not include any financial or other support in the form of donations or gifts, given by the donors subject to the condition that the service provider is under no obligation to provide anything in return to such donors.

Events, i.e., tournaments or championships organized only by specified bodies in relation to games, sport, cultural events etc shall be exempt. Any sponsorship of event organized by any other body like BCCI arranging IPL cricket tournament shall not be exempt. 

Vide Notification 30/2012-ST dated 20.6.2012, entire service tax is payable by the body corporate or partnership firm receiving the service in India under reverse charge method. 

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