Clarification by CBDT in respect of levy of service tax
on certain vocational education/training/ skill development courses (VEC)
offered by the
(a)
Government (Central Government or State Government) or,
(b)
Local authority themselves or,
(c)
By an entity independently established by the Government under the law, as a
society or any other similar body.
As
far as (a) and (b) above is concerned, when a VEC is offered by an institution
of the Government or a local authority, question of service tax does not arise.
In terms of section 66D (a), only
specified services provided by the Government are liable to tax and VEC is
excluded from the service tax.
With
res[pect to (c) above,When the VEC is offered by an institution, as an
independent entity in the form of society or any other similar body, service
tax treatment is determinable by the application of either sub-clause (ii) or
(iii) of clause (l) of section 66D of the Finance Act, 1994.
Therefore
question of service tax does not arise only for the following two cases
(1)
66D(l)(ii): refers to
“qualification recognized by any law”
The
words “recognized by any law” will include such courses as are approved or
recognized by any entity established under a central or state law including
delegated legislation, for the purpose of granting recognition to any education
course including a VEC.
(2)
66D(l)(iii): refers
to “approved VEC”.
