Service Tax — Imposition of - Service Tax - 20-C.E. (Service Tax - 5)/97

The Trade is hereby informed that the Finance Bill 1997 proposes to expand Service Tax to the following service from a date to be notified after the Finance Bill 1997 is passed by the Parliament. (i) a consulting engineer to a client in relation to one or more disciplines of engineering; (ii) a custom house agent to a client in relation to the entry or departure of conveyances or the import or export of goods; (iii) a steamer agent to a shipping line in relation to a ship s husbandry or despatch or administrative work related thereto as well as the booking, advertising or canvassing of cargo including container feeder services; (iv) a clearing and forwarding agent to a client in relation to clearing and forwarding operations in any manner; (v) a manpower recruitment agency to a client in relation to the recruitment of manpower in any manner; (vi) an air travel agent to a customer in relation to the booking of passage for travel by air; (vii) a goods transport operator to a customer in relation to carriage of goods by road in a goods carriage; (viii) an outdoor caterer to a client in relation to catering at a place other than his own; (ix)(a) a pandal or shamiana contractor to a client in relation to a pandal or shamiana in any manner including the services rendered as a caterer; (ix)(b) a mandap keeper to a customer in relation to the use of a mandap in any manner including the facilities provided to the customer in relation to such use as well as services, if any rendered as a caterer; this also includes the hiring of banquet halls, marriage halls, invitation halls, etc. including in hotels on the occasion of weddings, business or social functions; (x)(a) a tour operator to any person in relation to a tour; (x)(b) a rent a cab operator scheme in relation to the renting of a cab. 1.1 Service tax is sought to be levied on the above services at the rate of 5 per cent on the gross amount charged to the client or customer or any other person, as the case may be. 1.2 In the case of the services rendered by an air travel agent, the value of the taxable service shall be the gross amount charged from the client for the booking of passage by air and shall also include the commission received by the air travel agent from the airlines but shall not include the airfare. 1.3 In the case of the services rendered by a goods transport operator, the value of the taxable service shall be the gross amount charged from the client for such services, including freight but excluding insurance charges. 1.4 In the case of the services rendered by an outdoor caterer, the value of the taxable service shall be the gross amount charged from the client, which shall include the charges for supply of food, edible preparations, alcoholic and non-alcoholic beverages, crockery and similar articles and accoutrements. It may be noted that in-flight caterers are also included in the definition of outdoor caterers. 1.5 In the case of the services rendered by a pandal or shamiana contractor, the value of the taxable service shall be the gross amount charged from the client, including charges for setting the pandal or shamiana, it may be mentioned that where any catering service is also rendered by a pandal or shamiana contractor the gross amount of catering charges will also be included in the value of taxable service. It may also be seen that the definition of mandap keeper it wide enough to include banquet halls, invitation halls, marriage hall or any other premises which is offered for organising any social, official or business functions. The halls or rooms taken in hotels for any such function are also covered by the definition. 1.6 In the case of the services rendered by a tour operator, the value of the taxable service shall be the gross amount charged from the client, including charges for providing accommodation, food and other facilities in the course of tour. Tour operators will include tourist taxis and tourist buses, having a tourist permit under the Motor Vehicles Act, 1988 or the rules made there-under. In the case of the services rendered by a rent a cab scheme operator, the value of the taxable Service shall be the gross amount charged from the client for renting a cab and shall include the rental thereof. 1.7 The levies shall come into force from a date to be notified in the official gazette after the Finance Bill, 1997 is passed by the Parliament.