CLEANING SERVICES, Service Tax

[SURYA KANT GUPTA]

Does the services of  lifting of ash from the factory premises and dumping the same somewherealse falls under the category of Cleaning Services? 

Posts / Replies

[CA Rachit Agarwal]

For removal of Ash to fall under cleaning activity following to be satisfied all the activities such as Lifting, Transporting, Unloaidng and deisposing of Ash to be done by the contractor. Cleaning includes all activities. If ash is only transported than that would not constitute the cleaning activity.

The services would exempted.

Further transportation of ash would also NOT be covered under "Transportation of goods by road" becuase ash is not goods.

[Seetharaman K C]

Section 65(24b) defines 'cleaning activity' as under -

"Cleaning activity" means cleaning, including specialized cleaning service such as disinfecting, exterminating or sterilizing of objects or premises, of -

(i)   Commercial or industrial buildings and premises thereof; or

(ii)   Factory, plant or machinery, tank or reservoir of such commercial or industrial building and premises thereof, but does not include such services in relation to agriculture, horticulture, animal husbandry or dairying".

The definition suggests that cleaning activities should relate to cleaning and includes specialised cleaning activities. Thus, cleaning should satisfy the following conditions and includes-

(a)   cleaning activity itself

(b)   includes specialised cleaning service like -

(i)    disinfecting

(ii)    exterminating

(iii)   sterilizing etc.

(c)   specialised cleaning should be of objects or premises

(d)   subject matter of cleaning activities should be -

(i)    commercial or industrial buildings or their premises (both buildings as well as premises are covered) or

(ii)    factory, plant or machinery, tank or reservoir of such commercial or industrial buildings and premises

(e)   it includes only immovable property being commercial or industrial buildings or its premises and specified movable/immovable objects therein.

(f)    cleaning services does not include services rendered in relation to -

(i)    agriculture

(ii)    horticulture

(iii)   animal husbandry

(iv)   dairying

(g)   it excludes residential buildings or its premises and tank, reservoir etc situated therein.

Taxable Service

Section 65(105)(zzzd) defines taxable service as under -

'any service provided or to be provided to any person, by any other person, in relation to cleaning activity'.

For cleaning activities to be taxable, following conditions should be satisfied -

(a)   service should be provided to other person i.e., service should be undertaken on behalf of others

(b)   service may be any service in relation to cleaning activity

(c)   service should be rendered for a consideration

Cleaning activities in only commercial and industrial buildings or their premises shall be covered for taxability of cleaning services and cleaning of residential buildings and premises have been kept out of the service tax net.

The cleaning activity undertaken by you relates to a factory and would there come under the purview of Cleaning services