Service Tax not leviable on services by qualified engineers as insurance surveyor and loss assessor - Service Tax - 34/02/2001

This Circular has been rescinded by Circular No. 93/4/2007-ST, Dated: May 10, 2007 Service Tax not leviable on services by qualified engineers as insurance surveyor and loss assessor Circular No. 34/2/2001-CX. Dated 30-4-2001 I am directed to say that doubts have been raised as to whether the services rendered by qualified engineers as insurance surveyor and loss assessor, would come under the purview of service tax levied on the service provided by the consulting engineers. 2. The matter has been examined in the Board's office. As per sub-clause (g) of clause (48) of section 65 of the Finance Act, 1994 as amended, the taxable service in case of consulting engineer 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 to a client in one or more disciplines of engineering". Hence the services which will come under the purview of service tax in the category of consulting engineer, will be those rendered in a discipline of engineering, by a qualified engineer or an engineering firm. 3. Section 64UM of the Insurance Act, 1938, prescribes that any qualified engineer, chartered accountant, cost accountant, actuary, any person holding diploma in relation to insurance from a recognized institute or any technical qualification which may be prescribed, can act as surveyor or loss assessor after obtaining a licence. 4. It is evident that a number of professionals other than engineers can also be engaged by the insurer for surveying and loss assessments. The very fact that a number of professionals such as Chartered Accountant, Cost Accountant, Actuary, or a person holding diploma in relation to insurance can provide services as surveyors or loss assessor in itself suggest that the service provided by the surveyor or loss assessor is not in the field of engineering. It is a job, which can be performed by an engineer so also by other specified professionals. The function to be performed by the surveyor or the loss assessor is to compute and assess the nature and quantum of loss/valuation of property, which may require basic knowledge of accounting, mathematics and science etc. The services provided by any qualified engineer in the area of insurance survey or loss assessment are therefore not in the nature of services in an engineering discipline. Even as per the WTO classification of services, insurance survey and loss assessment is categorised as insurance auxiliary services and not as "consulting engineer services". 5. In view of the facts mentioned above, it is clarified that the term 'consulting engineer' as defined in the Service Tax Act, will not include those qualified engineers who act as 'insurance surveyors and loss assessor' within its scope and therefore service tax levy on the consulting engineer in any discipline of engineering will not cover the insurance surveying and loss assessment services rendered by a qualified engineer. 6. Trade and field formations may be advised accordingly. 7. Receipt of this circular may please be acknowledged.