Definition Of Service As Per Service Tax Act

services taxDefinition Of Service As Per Service Tax Act

Service as per Service Tax is described as the action that is taken for consideration and is done by any one individual for some other individual.

What Is Not To Be Included As Service?

The description also gives more information as to what a service must not include such as  an activity which comprise of only relocate of immovable property or goods title by means of gift, sale or in some other format its not termed as a service.

It must not be a goods sale, which is done by transferring, supplying and delivering of goods. Money transaction or any tangible transaction ought not to be included.

Any employee and employer based service cannot come under the service umbrella.

Any set up based on tribunal area coming under the law for time being under force and the fees, which is to be paid to a court, is not termed as service.

Any action that is said to be agreed out for a consideration, then it is taxable.

It denotes, the process performed out without any consideration like, gifts, free charities or donations are not eligible for tax under service tax. Processes indulging altruistic work for consideration would be a taken as a service and it can be taxed.

Donations that is given to an altruistic entity are not taken as taxable unless and until the charity provides something tangible in return.

Service Tax Factors And Considerations:

Money Based Consideration For The Tax:

Monetary consideration is described as a consideration, which you obtain in the form of money. Money is inclusive not only from the form of cash but also various forms such as,

  • Cheque,
  • Promissory note,
  • Bill of exchange,
  • Letter of credit,
  • Draft,
  • Pay order,
  • Traveler’s cheque,
  • Money order,
  • Electronic or postal withdrawal or
  • any equivalent instrument.
READ  Law Relating to Gift Tax in India

Consideration where money is not involved directly:

Consideration without monetary involvement means processes which are not involving money but in kind.

It involves various processes which are used as consideration for service provided.

  • Goods supply and services,
  • Refraining or stopping to take an action,
  • Adjusting to an event or a circumstances and
  • approving to do and doing some action, etc

are few such processes.

In certain cases where equal amount of money is not estimated, in that case it is calculated by comparing the charges inhibited by others in this trade for the same service. And suppose the exact worth cannot be ascertained, the service cost provided should be higher than the equal money value.

A new concept of “Negative List” of services (all the services that are not taxable as under Service Tax Act) was coined during 2012. Find out What is Not Service as Per Service Tax: Negative List


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