Letter [F.No.137/125/2011-ST], dated 27-2-2012, On Service Tax liability on Tyre Retreading Activity

On Service Tax liability on Tyre Retreading Activity

Issue: Whether the activity is manufacture under Central Excise or Service with service Tax liability.

Facts

1. Rethreading of tyres is mentioned in CET Act, which may qualify them as excisable goods. However it does not satisfy, the additional requirement, as per section 3 of the CEA as to the goods to have been produced or manufactured in India.

2. In the case of M/s Ahmedabad Electricity Co Ltd  the observations of Hon'ble Supreme Court  is relevant.

 Some of the observations as made in this judgment are reproduced below:

“...Therefore, simply because goods find a mention in one of the entries of the First Schedule does not mean that they have become liable for payment of excise duty. Goods have to satisfy the test of being produced or manufactured in India. It is settled law that excise duty is a duty levied on manufacture of goods. Unless goods are manufactured in India, they cannot be subjected to payment of excise duty. There is no merit in the argument that simply because a particular item is mentioned in the First Schedule, it becomes eligible to excise duty."

3.Thus, a mere mention in the Central Excise Tariff Act of "Retreading of Tyres" does not make the activity of Retreading of Tyres excisable, since the test of production or manufacture has to be also satisfied.

In this context, the judgment of Hon'ble Supreme Court in the case of M/s P.C. Cheriyan v. Mst. Barfi Devi is relevant. In the said judgment, Hon'ble Supreme Court has observed that-

"The retreading of old tyres does not bring into being a commercially distinct or different entity. The old tyre retains its original character, or identity as a tyre. Retreading does not completely transform it into another commercial article, although it improves its performance and serviceability as a tyre. Retreading of old tyres is just like resoling of old shoes."

4. Though this judgment is given in the context of Transfer of Property Act, however, the basic principle behind "manufacture" of coming into existence of a commercially different and distinct entity is equally applicable to Central Excise Act and has been relied upon by the Tribunal in certain cases while interpreting 'manufacture' under section 2(F) of the Central Excise Act.

5. Thus, retreading of tyres is covered under the ambit of the service 'Management Maintenance & Repair Service' and is liable to payment of service tax.

A Pictorial representation of New Service Tax Regime w.e.f April 01 2012

A Pictorial representation of New Service Tax Regime w.e.f  April 01 2012, Read along with Proposed sections of Finance Act 1994, Sec 65B(44), Sec 66D, Sec 66E and Notification No 12/2012 ST Dated 17 March 2012.

Notification No.3/2012 - ST,dt17th March, 2012 On Amendment to Service Tax Rules 1994

           Amendment to Service Tax Rules 1994

1.  In rule 2: Definitions

                Renumbered sub-clauses  cc), (cc) and (ccc) as  (ca), (cb) and (cc) respectively;

                New sub-clause shall be inserted, namely:—

                (cd)- Partnership firm includes a limited liability partnership;

2. In rule 4A : Taxable service to be provided or credit to be distributed on invoice, bill or challan -       

                In Subrule 1:

                Time limit for issue of Invoice extended from fourteen days to Thirty days.

               

                New Provsio 4 :

                For banking and other financial services, the period within which the invoice, bill or challan,          shall be forty five days.

                New Provsio 6 :

                1. If an amount up to rupees one thousand in excess of the amount indicated in the                 invoice is received

                2. And the provider of taxable service has opted to determine the point of taxation  based on the option as given in Point of Taxation Rules, 2011, No invoice is required to  be issued to such extent.

3. In Rule 6: Payment of service tax

                New Provsio:

                1. For taxable services covered under sub-rule (1) of rule 3 of     the Export of Services    Rules, 2005, this sub-rule shall not apply if  the payment is received within the period  specified by the Reserve Bank of India, or within such extended period(s).

               

                2. (a)For  individuals and partnership firms whose aggregate value of taxable services fifty lacs rupees or less in the previous financial year

                                (b) the service provider shall have the option to pay tax on taxable services provided or to be provided by him up to a total of rupees fifty lacs in the current financial year,

                                (c) on the dates specified in this sub-rule with respect to the month or quarter, in  which payment is actually received.(Non applicability of POR rules 2011).

                3. Substitution of new (2) for Sub rule (4B)

                                1.The adjustment of excess amount paid can be adjusted without any limit.

                                2. However if  excess amount paid is on account of interpretation of law,  taxability, classification, valuation or applicability of any exemption notification, adjustment is not permitted.

                4. Substitution of clause (ii) in Sub rule (7A)

                                 An insurer carrying on life insurance business

                        a.3% of the gross amount of premium charged for first year.

                        b.1.5% of the gross amount of premium charged for subsequent years.

           

            5. Substitution of clause (7B)

                                The person liable to pay service tax in relation to purchase or sale of foreign currency, calculated  as a specific  percentage, will be towards discharge of his service tax liability instead of paying service tax at the rate specified in section 66 of Chapter V of the Act:

           

Sl no	Gross Amount of Currency changed	Specific  percentage	Subject to Minimum.(Rs)
1.	Upto Rs 1 Lacs	0.12%	30
2.	> Rs 1 Lacs to  Rs 10 Lacs	0.06%	120
3.	> Rs 10 Lacs	0.01%	660

            6. Substitution of clause (7C)

                Any person assisting in organising lottery in any manner

Sl no	Rate	Condition
1	Rs 7000 Per  Rs Lac of Aggregate Face Value	>80% Guaranteed Price money
2	Rs 11000 Per  Rs Lac of Aggregate Face Value	<80% Guaranteed Price money

Proposals regarding Service Tax in Finance Bill 2012.

Insertion of new proviso in Section 66

                 The following proviso shall be inserted with effect from such date as the Central

                Government may, by notification, appoint, namely:––

                "Provided that the provisions of this section shall not apply with effect from such date as the   Central Government may, by notification, appoint.";

Insertion of new sub section in Section 66A

                In section 66A, after Explanation 2 occurring at the end of sub-section (2), the following               subsection  shall be inserted with effect from such date as the Central Government may, by        notification,  appoint, namely:––

                "(3) The provisions of this section shall not apply with effect from such date as the CentralGovernment may, by notification, appoint.";

Insertion of new Section 66B

                There shall be levied a tax (hereinafter referred to as the service tax) at the rate of twelve

                per cent. on the value of all services, other than those services specified in the negative list, provided or agreed to be provided in the taxable territory by one person to another and              collected in such manner as may be prescribed.

Insertion of new Section 66C

(1) The Central Government may, having regard to the nature and description of various              services, by rules made in this regard, determine the place where such services are provided or   deemed to have been provided or agreed to be provided or deemed to have been agreed to be   provided.

(2) Any rule made under sub-section (1) shall not be invalid merely on the ground that either

the service provider or the service receiver or both are located at a place being outside the

taxable territory.

Insertion of new Section 66D Regarding Negative list ( dealt separately)

Insertion of new Section 66E.

                The following shall constitute declared services, namely:––

(a) Renting of immovable property;

(b) Construction of a complex, building, civil structure or a part thereof, including a complex

or building intended for sale to a buyer, wholly or partly, except where the entire            consideration is received after issuance of completion-certificate by the competent authority.

Explanation.— For the purposes of this clause,—

(I) the expression "competent authority" means the Government or any authority         authorised to issue completion certificate under any law for the time being in force and in case of non requirement of such certificate from such authority, from any of the following, namely:––

(A) architect registered with the Council of Architecture constituted under  the  Architects  Act, 1972; or

(B) chartered engineer registered with the Institution of Engineers (India); or

(C) licensed surveyor of the respective local body of the city or town or                 village ordevelopment or planning authority;

(II) the expression "construction" includes additions, alterations, replacements or           remodelling of any existing civil structure;

(c) Temporary transfer or permitting the use or enjoyment of any intellectual property right;

(d) Development, design, programming, customisation, adaptation, upgradation,

enhancement, implementation of information technology software;

(e) Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to

do an act;

(f) Transfer of goods by way of hiring, leasing, licensing or in any such manner without

transfer of right to use such goods;

(g) Activities in relation to delivery of goods on hire purchase or any system of payment by

instalments;

(h) Service portion in the execution of a works contract;

(i) Service portion in an activity wherein goods, being food or any other article of human

consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of

the activity.

Insertion of new Section 66F.

                 (1) Unless otherwise specified, reference to a service (herein referred to as main service)

                shall not include reference to a service which is used for providing main service.

                (2) Where a service is capable of differential treatment for any purpose based on its description,

                the most specific description shall be preferred over a more general description.

                (3) Subject to the provisions of sub-section (2), the taxability of a bundled service shall be

                determined in the following manner, namely:––

(a) if various elements of such service are naturally bundled in the ordinary course of business,it shall be treated as provision of the single service which gives such bundle its essential

character;

(b) if various elements of such service are not naturally bundled in the ordinary course of

business, it shall be treated as provision of the single service which results in highest liability of service tax.

Explanation.— For the purposes of sub-section (3), the expression "bundled service"   means a   bundle of provision of various services wherein an element of provision of one service is combine   with an element or elements of provision of any other service or services.’;

Omission of Explanation clause (b) Under Section 67,

                In the Explanation, clause (b) shall be omitted, with effect from such date as the

                Central Government may, by notification, appoint;

Insertion of new Section 67A

                The rate of service tax, value of a taxable service and rate of exchange, if any, shall be

                the rate of service tax or value of a taxable service or rate of exchange, as the case may be, in force  or as applicable at the time when the taxable service has been provided or agreed to be provided.

Explanation.— For the purposes of this section, "rate of exchange" means the rate of  exchange referred to in the Explanation to section 14 of the Customs Act, 1962.';

Insertion of new Proviso to Section 68

                With effect from such date as the Central Government may, by notification, appoint,––

(i) for the words "any taxable service notified", the words "such taxable services as may be notified"     shall be substituted;

(ii) the following proviso shall be inserted, namely:––

"Provided that the Central Government may notify the service and the extent of  service tax which shall be payable by such person and the provisions of this Chapter shall apply to such person to the extent so specified and the remaining part of the service tax shall be paid by the service provider.";

Insertion of new Section 72A.

                (1) If the Commissioner of Central Excise, has reasons to believe that any person liable to pay  service tax (herein referred to as ''such person''),––

                (i) has failed to declare or determine the value of a taxable service correctly; or

                (ii) has availed and utilised credit of duty or tax paid-

                (a) which is not within the normal limits having regard to the nature of taxable service provided, the   extent of capital goods used or the type of inputs or input services used, or any other relevant factors as he may deem appropriate; or

                (b) by means of fraud, collusion, or any wilful misstatement or suppression  of facts; or

                (iii) has operations spread out in multiple locations and it is not possible or practicable to obtain a true and complete picture of his accounts from the registered  premises falling under the jurisdiction of the said Commissioner he may direct such  person to get his accounts audited  by a chartered accountant or cost accountant nominated by him, to the extent and for the period as may be specified by the  Commissioner.

                (2) The chartered accountant or cost accountant referred to in sub-section (1) shall, within the period specified by the said Commissioner, submit a report duly signed and certified by   him to the  said Commissioner mentioning therein such other particulars as may be specified  by him.

                (3) The provisions of sub-section (1) shall have effect notwithstanding that the accounts of  such person have been audited under any other law for the time being in force.

                (4) The person liable to pay tax shall be given an opportunity of being heard in respect of any   material  gathered on the basis of the audit under sub-section (1) and proposed to be         utilised in   any proceeding under the provisions of this Chapter or rules made there under.

                Explanation.— For the purposes of this section,––

                (i) "chartered accountant" shall have the meaning assigned to it in clause (b) of sub-                       section

                (1) of section 2 of the Chartered Accountants Act, 1949;

                (ii) "cost accountant" shall have the meaning assigned to it in clause (b) of sub-                     section (1) of section 2 of the Cost and Works Accountants Act, 1959.';

Substitution of words and insertion of New Sub section to Section 73

                (i) For the words "one year", wherever they occur, the words "eighteen months" shall be

                substituted;

                (ii) After sub-section (1), the following sub-section shall be inserted, namely:––

                "(1A) Notwithstanding anything contained in sub-section (1), the Central Excise Officer may serve, subsequent to any notice or notices served under that sub-section, a statement,

                containing the details of service tax not levied or paid or short levied or short paid or erroneously   refunded for the subsequent period, on the person chargeable to service tax, then, service of such  statement shall be deemed to be service of notice on such person, subject to the condition that the   grounds relied upon for the subsequent period are same as are mentioned in the earlier notices.";

                (iii) In sub-section (4A), for the words, brackets and figures "sub-sections (3) and (4)", the

Renumbering of subsection, insertion of new Subsection to Section 80

                Section 80 shall be re-numbered as sub-section

                 (1) thereof, and after sub-section (1) as so renumbered, the following sub-section shall be   inserted, namely:––

                "(2) Notwithstanding anything contained in the provisions of section 76 or section 77 or                section 78, no penalty shall be imposable for failure to pay service tax payable, as on the 6th   day of   March, 2012, on the taxable service referred to in sub-clause (zzzz) of clause (105) of    section    65,subject to the condition that the amount of service tax along with interest is paid      in full     within a period of six months from the date on which the Finance Bill, 2012 receives               the assent   of the President.";

Substitution of Letters and figures in Section 83

                In section 83, for the figures and letters "12E, 14, 14AA, 15, 33A, 34A, 35F", the figures,

                letters, words and brackets "12E, 14, 15, 31, 32, 32A to 32P (both inclusive), 33A, 34A, 35EE, 35F" shall be substituted;

Insertion of new Subsection to Section 85

                In section 85,(i) in sub-section (3), after the words "under this Chapter", the words and                figures ",   made before the date on which the Finance Bill, 2012 receives the assent of the               President" shall be   inserted;

                (ii) after sub-section (3), the following sub-section shall be inserted, namely:––

                "(3A) An appeal shall be presented within two months from the date of receipt of the decision or  order of such adjudicating authority, made on and after the Finance Bill, 2012      receives the assent  of the President, relating to service tax, interest or penalty under this Chapter: Provided that the  Commissioner of Central Excise (Appeals) may, if he is satisfied that the appellant was prevented b sufficient cause from presenting the appeal within the aforesaid period of two months, allow it to    be presented within a further period of one month.";

Substitution of sub section in Section 86

                In section 86,–v(i) in sub-section (1), after the words "against such order", the words "within   three months of the date of receipt of the order" shall be inserted;

                (ii) for sub-section (3), the following sub-section shall be substituted, namely:––

                "(3) Every appeal under sub-section (2) or sub-section (2A) shall be filed within four months from the date on which the order sought to be appealed against is received by the Committee of Chief Commissioners or, as the case may be, the Committee of Commissioners.";

Substitution of words in Section 88

                In section 88, for the word "duty", the word "tax" shall be substituted;

Substitution of Clause under Section 89(1)

                In section 89, in sub-section (1), for clause (a), the following clause shall be substituted witheffect from the date on which the Finance Bill, 2012 receives the assent of the President,            namely:—

                "(a) knowingly evades the payment of service tax under this Chapter; or";

Substitution of words in Section 93A

                In section 93A, for the words "of such goods", the words "or removal or export of such                 goods"shall  be substituted;

Insertion of new Section 93B

                After section 93A, the following section shall be inserted, namely:––

                All rules made under section 94 and applicable to the taxable services shall also be

                applicable to any other service in so far as they are relevant to the determination of any tax liability, refund, credit of service tax or duties paid on inputs and input services or for carrying out    the provisions of Chapter V of the Finance Act, 1994.'';

Omission of words in clause and insertion of new clause to Section 94

                In section 94, in sub-section (2),––

                (i) clause (ee) shall be omitted;

                (ii) in clause (hhh), after the words "provision of taxable service", the words, figures and              letter"under section 66C" shall be inserted;

                (iii) clause (i) shall be re-lettered as clause (k) thereof and before the clause (k) as so     relettered,the following shall be inserted, namely:––

                "(i) provide for the amount to be paid for compounding and the manner of compounding of

                offences;

                (j) provide for the settlement of cases, in accordance with sections 31, 32 and 32A to 32P

                (both inclusive), in Chapter V of the Central Excise Act, 1944 as made applicable to service tax

Insertion of new Subsection to Section 95

                In section 95, after sub-section (1H), the following sub-section shall be inserted, namely:– "(1H). If any difficulty arises in giving effect to section 143 of the Finance Act, 2012, in so far as it                relates to insertion of sections 65B, 66B, 66C, 66D, 66E and section 66F in Chapter V of        the Finance   Act, 1994, the Central Government may, by order published in the Official Gazette, which is not    inconsistent with the provisions of this Chapter, make such provisions, as may be necessary or  expedient for the purpose of removing the difficulty from such date, which shall include the power  to give retrospective effect from a date not earlier than the date of coming into force of theFinance   Act, 2012:

                Provided that no such order shall be made after the expiry of a period of two years from thedate of coming into force of these provisions.";

Substitution of Clause under Section 96C

                In section 96C, in sub-section (2), for clause (e), the following clause shall be substituted,

                namely:––

                "(e) admissibility of credit of duty or tax in terms of the rules made in this regard;";

Insertion of new Section 97

                After section 96J, the following sections shall be inserted, namely:––

                 (1) Notwithstanding anything contained in section 66, no service tax shall be levied or

                collected in respect of management, maintenance or repair of roads, during the period on and from  the 16th day of June, 2005 to the 26th day of July, 2009 (both days inclusive).

                (2) Refund shall be made of all such service tax which has been collected but which would not have  been so collected had sub-section (1) been in force at all material times.

                (3) Notwithstanding anything contained in this Chapter, an application for the claim of refund of  service tax shall be made within a period of six months from the date on which the Finance Bill,  2012 receives the assent of the President.

Insertion of new Section 98

                (1) Notwithstanding anything contained in section 66, no service tax shall be levied or

                collected in respect of management, maintenance or repair of non-commercial Government  buildings, during the period on and from the 16th day of June, 2005 till the date on which   section 66B comes into force.

                (2) Refund shall be made of all such service tax which has been collected but which would not   have been so collected had sub-section (1) been in force at all material times.

                (3) Notwithstanding anything contained in this Chapter, an application for the claim of refund of service tax shall be made within a period of six months from the date on which the Finance Bill,2012 receives the assent of the President.".

Under Section 65B.

 (1) "actionable claim" shall have the meaning assigned to it in section 3 of the Transfer of

Property Act, 1882;

(2) "advertisement" means any form of presentation for promotion of, or bringing awareness

about, any event, idea, immovable property, person, service, goods or actionable claim through

newspaper, television, radio or any other means but does not include any presentation made

in person;

(3) "agriculture" means the cultivation of plants and rearing of all life-forms of animals,

except the rearing of horses, for food, fibre, fuel, raw material or other similar products;

(4) "agricultural extension" means application of scientific research and knowledge to

agricultural practices through farmer education or training;

(5) "agricultural produce" means any produce of agriculture on which either no further

processing is done or such processing is done as is usually done by a cultivator or producer

which does not alter its essential characteristics but makes it marketable for primary market;

(6) "Agricultural Produce Marketing Committee or Board" means any committee or board

constituted under a State law for the time being in force for the purpose of regulating the

marketing of agricultural produce;

(7) "aircraft" has the meaning assigned to it in clause (1) of section 2 of the Aircraft Act,

1934;

(8) "airport" has the meaning assigned to it in clause (b) of section 2 of the Airports Authority

of India Act, 1994;

(9) "amusement facility" means a facility where fun or recreation is provided by means of

rides, gaming devices or bowling alleys in amusement parks, amusement arcades, water

parks, theme parks or such other places but does not include a place within such facility where

other services are provided;

(10) "Appellate Tribunal" means the Customs, Excise and Service Tax Appellate Tribunal

constituted under section 129 of the Customs Act, 1962;

(11) "approved vocational education course" means,––

(i) a course run by an industrial training institute or an industrial training centre affiliated

to the National Council for Vocational Training offering courses in designated trades notified

under the Apprentices Act, 1961; or

(ii) a Modular Employable Skill Course, approved by the National Council of Vocational

Training, run by a person registered with the Directorate General of Employment and Training,

Union Ministry of Labour and Employment; or

(iii) a course run by an institute affiliated to the National Skill Development Corporation

set up by the Government of India;

(12) "assessee" means a person liable to pay tax and includes his agent;

(13) "associated enterprise" shall have the meaning assigned to it in section 92A of the

Income-tax Act, 1961;

(14) "authorised dealer of foreign exchange" shall have the meaning assigned to "authorised

person" in clause (c) of section 2 of the Foreign Exchange Management Act, 1999;

(15) "betting or gambling" means putting on stake something of value, particularly money,

with consciousness of risk and hope of gain on the outcome of a game or a contest, whose

result may be determined by chance or accident, or on the likelihood of anything occurring or

not occurring;

(16) "Board" means the Central Board of Excise and Customs constituted under the Central

Boards of Revenue Act, 1963;

(17) "business entity" means any person ordinarily carrying out any activity relating to

industry, commerce or any other business;

(18) "Central Electricity Authority" means the authority constituted under section 3 of the

Electricity (Supply) Act, 1948;

(19) "Central Transmission Utility" shall have the meaning assigned to it in clause (10) of

section 2 of the Electricity Act, 2003;

(20) "courier agency" means any person engaged in the door-to-door transportation of

time-sensitive documents, goods or articles utilising the services of a person, either directly or

indirectly, to carry or accompany such documents, goods or articles;

(21) "customs station" shall have the meaning assigned to it in clause (13) of section 2 of

the Customs Act, 1962;

(22) "declared service" means any activity carried out by a person for another person for

consideration and declared as such under section 66E;

(23) "electricity transmission or distribution utility" means the Central Electricity Authority; a

State Electricity Board; the Central Transmission Utility or a State Transmission Utility notified

under the Electricity Act, 2003; or a distribution or transmission licensee under the said Act, or

any other entity entrusted with such function by the Central Government or, as the case may

be, the State Government;

(24) "entertainment event" means an event or a performance which is intended to provide

recreation, pastime, fun or enjoyment, by way of exhibition of cinematographic film, circus,

concerts, sporting event, pageants, award functions, dance, musical or theatrical performances

including drama, ballets or any such event or programme;

(25) "goods" means every kind of movable property other than actionable claim and money;

and includes securities, growing crops, grass, and things attached to or forming part of the

land which are agreed to be severed before sale or under the contract of sale;

(26) "goods transport agency" means any person who provides service in relation to transport

of goods by road and issues consignment note, by whatever name called;

(27) "India" means,––

(a) the territory of the Union as referred to in clauses (2) and (3) of article 1 of the

Constitution;

(b) its territorial waters, continental shelf, exclusive economic zone or any other maritime

zone as defined in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and

other Maritime Zones Act, 1976;

(c) the seabed and the subsoil underlying the territorial waters;

(d) the air space above its territory and territorial waters; and

(e) the installations, structures and vessels located in the continental shelf of India and

the exclusive economic zone of India, for the purposes of prospecting or extraction or

production of mineral oil and natural gas and supply thereof;

(28) "information technology software" means any representation of instructions, data, sound

or image, including source code and object code, recorded in a machine readable form, and

capable of being manipulated or providing interactivity to a user, by means of a computer or an

automatic data processing machine or any other device or equipment;

 (29) "inland waterway" means national waterways as defined in clause (h) of section 2 of

the Inland Waterways Authority of India Act, 1985 or other waterway on any inland water, as

defined in clause (b) of section 2 of the Inland Vessels Act, 1917;

(30) "interest" has the meaning assigned to it in clause (28A) of section 2 of the Income-tax

Act, 1961;

(31) "local authority" means-

(a) a Panchayat as referred to in clause (d) of article 243 of the Constitution;

(b) a Municipality as referred to in clause (e) of article 243P of the Constitution;

(c) a Municipal Committee and a District Board, legally entitled to, or entrusted by the

Government with, the control or management of a municipal or local fund;

(d) a Cantonment Board as defined in section 3 of the Cantonments Act, 2006;

(e) a regional council or a district council constituted under the Sixth Schedule to the

Constitution;

(f) a development board constituted under article 371 of the Constitution; or

(g) a regional council constituted under article 371A of the Constitution;

(32) "metered cab" means any contract carriage on which an automatic device, of the type

and make approved under the relevant rules by the State Transport Authority, is fitted which

indicates reading of the fare chargeable at any moment and that is charged accordingly under

the conditions of its permit issued under the Motor Vehicles Act, 1988 and the rules made

thereunder;

(33) "money" means Indian legal tender, cheque, promissory note, bill of exchange, letter

of credit, draft, pay order, traveller cheque, money order, postal or electronic remittance or any

such similar instrument when used as consideration to settle an obligation or exchange with

Indian legal tender of another denomination but shall not include any currency that is held for

its numismatic value;

(34) "negative list" means the services which are listed in section 66D;

(35) "non-taxable territory" means the territory which is outside the taxable territory;

(36) "notification" means notification published in the Official Gazette and the expressions

‘‘notify’’ and "notified" shall be construed accordingly;

(37) "person" includes,––

(i) an individual,

(ii) a Hindu undivided family,

(iii) a company,

(iv) a society,

(v) a limited liability partnership,

(vi) a firm,

(vii) an association of persons or body of individuals, whether incorporated or not,

(viii) Government,

(ix) a local authority, or

(x) every artificial juridical person, not falling within any of the preceding sub-clauses;

(38) "port" has the meaning assigned to it in clause (q) of section 2 of the Major Port Trusts

Act, 1963 or in clause (4) of section 3 of the Indian Ports Act, 1908;

(39) "prescribed" means prescribed by rules made under this Chapter;

(40) "process amounting to manufacture or production of goods" means a process on which

duties of excise are leviable under section 3 of the Central Excise Act, 1944 or any process

amounting to manufacture of alcoholic liquors for human consumption, opium, Indian hemp

and other narcotic drugs and narcotics on which duties of excise are leviable under any State

Act for the time being in force;

(41) "renting" means allowing, permitting or granting access, entry, occupation, use or any

such facility, wholly or partly, in an immovable property, with or without the transfer of possession

or control of the said immovable property and includes letting, leasing, licensing or other similar

arrangements in respect of immovable property;

(42) "Reserve Bank of India" means the bank established under section 3 of the Reserve

Bank of India Act, 1934;

(43) "securities" has the meaning assigned to it in clause (h) of section 2 of the Securities

Contract (Regulation) Act, 1956;

(44) "service" means any activity carried out by a person for another for consideration, and

includes a declared service, but shall not include—

(a) an activity which constitutes merely,––

(i) a transfer of title in goods or immovable property, by way of sale, gift or in any other

manner; or

(ii) a transaction in money or actionable claim;

(b) a provision of service by an employee to the employer in the course of or in relation to

his employment;

(c) fees taken in any Court or tribunal established under any law for the time being in

force.

Explanation 1.— For the removal of doubts, it is hereby declared that nothing contained in

this clause shall apply to,––

(A) the functions performed by the Members of Parliament, Members of State Legislative,

Members of Panchayats, Members of Municipalities and Members of other local

authorities who receive any consideration in performing the functions of that office as such

member; or

(B) the duties performed by any person who holds any post in pursuance of the provisions

of the Constitution in that capacity; or

(C) the duties performed by any person as a Chairperson or a Member or a Director in a

body established by the Central Government or State Governments or local authority and

who is not deemed as an employee before the commencement of this section.

Explanation 2.–– For the purposes of this Chapter,—

(a) an unincorporated association or a body of persons, as the case may be, and a

member thereof shall be treated as distinct persons;

(b) an establishment of a person in the taxable territory and any of his other establishment

in a non-taxable territory shall be treated as establishments of distinct persons.

Explanation 3.— A person carrying on a business through a branch or agency or

representational office in any territory shall be treated as having an establishment in that territory;

(45) "Special Economic Zone" has the meaning assigned to it in clause (za) of section 2 of

the Special Economic Zones Act, 2005;

(46) "stage carriage" shall have the meaning assigned to it in clause (40) of section 2 of the

Motor Vehicles Act, 1988;

(47) "State Electricity Board" means the Board constituted under section 5 of the Electricity

(Supply) Act, 1948;

(48) "State Transmission Utility" shall have the meaning assigned to it in clause (67) of

section 2 of the Electricity Act, 2003;

(49) "support services" means infrastructural, operational, administrative, logistic, marketing

or any other support of any kind comprising functions that entities carry out in ordinary course

of operations themselves but may obtain as services by outsourcing from others for any reason

whatsoever and shall include advertisement and promotion, construction or works contract,

renting of immovable property, security, testing and analysis;

(50) "tax" means service tax leviable under the provisions of this Chapter;

 (51) "taxable service" means any service on which service tax is leviable under section 66B;

(52) "taxable territory" means the territory to which the provisions of this Chapter apply;

(53) "vessel" has the meaning assigned to it in clause (z) of section 2 of the Major Port

Trusts Act, 1963;

(54) "works contract" means a contract wherein transfer of property in goods involved in the

execution of such contract is leviable to tax as sale of goods and such contract is for the

purpose of carrying out construction, erection, commissioning, installation, completion, fitting

out, improvement, repair, renovation, alteration of any building or structure on land or for carrying

out any other similar activity or a part thereof in relation to any building or structure on land;

(55) words and expressions used but not defined in this Chapter and defined in the Central

Excise Act, 1944 or the rules made there under, shall apply, so far as may be, in relation to

service tax as they apply in relation to a duty of excise.'.