Service Tax — `Architects’ not under ambit of services provided by Consulting Engineers - Service Tax - Trade Notice No. 1/98-S.T.

This Circular has been rescinded by Circular No. 93/4/2007-ST , Dated : May 10, 2007 Service Tax `Architects' not under ambit of services provided by Consulting Engineers Trade Notice No. 1/98-S.T., dated 5-1-1998 of the Delhi -I Commissionerate Attention of the Trade and all other concerned is invited that a number of references have been received from the trade and industry and the field formations as to whether the services rendered by Architects would come under the purview of Service Tax levied on the services provided by consulting engineers. 2. The matter has been carefully examined by the department. As per sub-clause (g) of clause (41) of Section 65 of the Finance Act, 1994, as amended, the taxable service has been defined as "any service provided to a client, by a consulting engineer in relation to advice consultancy or technical assistance in any manner in one or more disciplines of engineering". Clause (11) of the said section defines a consulting engineer as "any professionally qualified engineer or engineering firm who, either directly or indirectly renders any advice, consultancy or technical assistance in any manner to a client in one or more disciplines of engineering. To come under the purview of Service Tax, the service rendered should be in a discipline of engineering and it should be rendered by a professionally qualified engineer or an engineering firm. 3. In this context, it is pertinent to note that there is a separate piece of legislation for architects, namely, The Architects Acts, 1972 which provides for the registration of architects and for matters connected therewith. Under this legislation, a Council of Architecture has been constituted for registration of architects and for governing other matters connected therewith. Any person who wants to practise as an `architect' has to register himself with the Council of Architecture subject to satisfaction of qualifications prescribed in this regard. The educational qualifications prescribed for registration of architects is a degree or diploma in architecture. Thus, the law itself recognises architects as a distinct or separate profession. 4. The All India Council for Technical Education who were consulted in the matter have clarified that `architecture' and `engineering' are two separate disciplines of technical education and these are two separate professions. Consulting Engineers Association of India who were consulted in the matter have stated that though there is overlapping in architectural and engineering services, yet "Architecture" discipline and "Engineering" discipline are two different disciplines and separate educational facilities exist for both the disciplines. 5. In the light of the facts mentioned above, it is clarified that the term `Consulting Engineer' will not include `architects' within its scope and therefore the Service Tax levy on the services rendered by a consulting engineer in any discipline of engineering will not cover the architectural services rendered by architects. 6. It is quite possible that many a time an engineering firm will be providing both engineering services and architectural services and a lump-sum amount is charged for both the services. In such cases service tax will have to be collected on the entire amount charged. However, if separate break-up is given in the bill for engineering services and architectural services, then service tax needs to be paid only the charges for engineering services. Authority F.No.354/128/97 -TRU Dated ; 18/12/1997