What are the Declared Services under Service Tax Law?
Service Tax is levied on almost all types of Services in India except the services mentioned in Negative List of Service Tax. There are some activities which are difficult to determine whether they are classified as a service or not. So, the Government has introduced these Declared Services for the purpose of levy of service tax.
Declared Services are not actual services. These have been listed separately under a category of declared services which are deemed to be as services. These are not in fact services (i.e., earlier these are difficult to determine them as service) but have been declared to be as services on which the service tax is levied.
The 9 Activities classified as a Declared Service under Section 66E are as follows.
- Renting of immovable property.
- Construction of complex building including building or complex intended for sale to a buyer except where entire consideration is received after issuance of completion certificate by completion certificate by the competent authority.
- Temporary transfer or permitting the use or the enjoyment of an intellectual property right.
- Development, design programming, implementation of IT Software.
- Agreeing to the obligation to refrain from an ACT or to tolerate a situation or an act (or) to do an ACT.
- Transfer of goods by way of hiring, leasing, without transfer of the right to use.
- Activities in relation to the delivery of goods on hire-purchase or any system of installments.
- Service portion in execution of works contract.
- Service portion in an activity wherein goods, being food or any drink (whether or not intoxicating) or any other article of human consumption if supplied in any manner as a part of activity.
Frequently Asked Questions
What is the shortcut to remember Declared Services?
The shortcut to remember these declared services is, “Ram Chandra IS A Great Hard Worker in Reliance”
In the above sentence, consider the capital letters
- R – Renting of immovable property.
- C – Construction.
- I – Intellectual property
- S – Software
- A – Agreeing to the obligation to refrain from an ACT or to tolerate a situation or an act (or) to do an ACT
- G – Goods
- H – Hire-purchase
- W – Works contract
- R – Restaurant services
Is there any case law which necessitated introduction of ST (service tax) on “Tolerating an Act or Situation” under Declared Service?
According to some CA experts there is no such case law.
Whether Gardening and security contracts are considered as taxable services?
Yes, Gardening and security contracts are taxable because they are not listed in the Negative list. These Gardening and security contracts comes under Landscaping and Lawn Care Services.
Landscaping and Lawn Care Services:
- Planting, relocating, transplanting, and removing indoor or outdoor plants.
- Identifying, curing or preventing plant diseases.
- Pruning, spraying, bracing, fertilizing and watering plants.
- Planting, trimming and edging grass or other ground cover.
- Planting & maintaining flower gardens.
- Trimming, maintaining, and spraying trees, etc.
What is the need of Declared Service?
- Overlap of services.
- Clarity to individual services.
- Validity of transactions.
- Facilitate collection of revenue.
What comes under ‘Intellectual Property Right’?
Intellectual Property Right includes
- Any other similar right to an intangible property.