Applicability of service tax on commodity market-reg - Service Tax - F.No.137/114/2008-CX-4

Applicability of service tax on commodity market-reg F.No.137/114/2008-CX-4 Ministry of Finance Department of Revenue Central Board of Excise CustomsNew Delhi Dated: August 5th, 2008 OFFICE MEMORANDUM Sub: Applicability of service tax on commodity market-reg Please refer to your letter No. 2/4/2007-IR/AB, dated 24.4.2008, addressed to Director General (Central Excise Intelligence) on the above subject. 2 In this regard it is to state that commodity exchanges have been specifically brought under service tax net w.e.f. 16.5.2008. The value of taxable service provided by the commodity exchanges shall include all charges levied on account of the services rendered (like transaction charges, annual subscription charges, processing charges and VSAT line charges). Therefore, unless broker charges service tax on gross amount, the CENVAT chain would break. Accordingly, w.e.f. 16.05.2008, this issue raised is not relevant in view of the fact that the Investor is liable to pay service tax on all charges, including any charges levied by exchange. As regards earlier period, it is matter of fact as to whether the broker acted as a pure agent or not. In this regard the illustrations given in the Service Tax (Determination of Value) Rules, 2006 may also be seen (these rules are available on the web-site of department). Gautam Bhattacharya Commissioner (ST)