77. PANDAL OR SHAMIANA SERVICES
(A) Date of Introduction
:
10.09.2004 by Section 90 of the Finance (No.2)
Act, 2004.
(B) Definition and scope of service:
“Pandal or shamiana”
means a place specially prepared or arranged for o
rganizing
an official, social or business function.
Explanation.-
For the purposes of this clause, ”social function”
includes marriage;
(Section 65(77)(a) of Finance Act, 1994 as amended)
“Pandal or shamiana contractor”
means a person engaged in providing any
service, either directly or indirectly, in connecti
on with the preparation, arrangement,
erection or decoration of a pandal or shamiana and
includes the supply of furniture, fixtures,
lights and lighting fittings, floor coverings and o
ther articles for use therein.
(Section 65 (77)(b) of Finance Act, 1994 as amended
)
"Taxable service"
means any service provided or to be provided to an
y person, by a
pandal or shamiana contractor in relation to a pand
al or shamiana in any manner and also
includes the services, if any, provided or to be pr
ovided as a caterer.
(Section 65(105)(zzw) of Finance Act, 1994 as amend
ed)
(C) Rate of Tax & Accounting Code
:
Rate of Tax Accounting Code
Service Tax 10% of the value of
services
00440054
Education Cess 2% of the service tax
payable
00440298
Secondary and
Higher Education
cess
1% of the service tax
payable.
00440426
Other –
Penalty/interest
As levied or applicable 00440055
( Rate of tax is effective from 24.
02.2009.)
( D ) Classification of Taxable Services:
(1) The
classification of taxable services shall be determi
ned according to
the terms of the sub-clauses (105) of secti
on 65;
(2) When for any reason , a taxable service is
prima facie, classifiable under two
or more sub-clauses of clause (105) of sect
ion 65, classification shall be
effected as follows :-
(a) the sub-clause which provides the most specific
description shall be preferred
to sub-clauses providing a more general description
;
(b) composite services consisting of a combination
of different services which
cannot be classified in the manner specified in cla
use (a), shall be classified
as if they consisted of a service which gives them
their essential character, in
so far as this criterion is applicable;
(c) when a service cannot be classified in the mann
er specified in clause (a) or
clause (b), it shall be classified under the sub-cl
ause which occurs first among
the sub-clauses which equally merits consideration.
( Sec.65A of Finance Act,1994)
(E) Valuation of taxable services for charging Serv
ice tax
(1) Service tax chargeable on any taxable service
with reference to its value shall,—
(i) in a case where the provision of service is for
a consideration in money, be the
gross amount charged by the service provider for su
ch service provided or to be
provided by him;
(ii) in a case where the provision of service is fo
r a consideration not wholly or partly
consisting of money, be such amount in money, with
the addition of service tax
charged, is equivalent to the consideration;
(iii) in a case where the provision of service is f
or a consideration which is not
ascertainable, be the amount as may be determined i
n the prescribed manner.
(2) Where the gross amount charged by a service pro
vider, for the service provided or to be
provided is inclusive of service tax payable, the v
alue of such taxable service shall be
such amount as, with the addition of tax payable, i
s equal to the gross amount charged.
(3) The gross amount charged for the taxable servic
e shall include any amount received
towards the taxable service before, during or after
provision of such service.
(4) Subject to the provisions of sub-sections (1),
(2) and (3), the value shall be determined
in such manner as may be prescribed.
Explanation.—For the purposes of this section,—
(a) “consideration” includes any amount that is pay
able for the taxable services
provided or to be provided;
(b) “money” includes any currency, cheque, promisso
ry note, letter of credit, draft, pay
order, travellers cheque, money order, postal remit
tance and other similar
instruments but does not include currency that is h
eld for its numismatic value;
(c) “gross amount charged” includes payment by cheq
ue, credit card, deduction from
account and any form of payment by issue of credit
notes or debit notes and
‘
book
adjustment, and any amount credited or debited, as
the case may be, to any
account, whether called “Suspense account” or by an
y other name, in the books of
account of a person liable to pay service tax, wher
e the transaction of taxable
service is with any associated enterprise
.
( Sec.67 of Finance Act,1994)
Inclusion in or Exclusion from value of certain exp
enditure or cost:
(1) Where any expenditure or costs are inc
urred by the service provider in the course
of providing taxable service, all such expenditure
or costs shall be treated as consideration
for the taxable service provided or to be provided
and shall be included in the value for the
purpose of charging service tax on the said service
.
[Rule 5(1) of Service Tax (Determination of Value)
Rules,2006)]
(2) The expenditure or costs incurred by the
service provider as a pure agent of the
recipient of service, shall be excluded from the v
alue of the taxable service if all the
following conditions are satisfied, namely:-
(i) the service provider acts as a pure agen
t of the recipient of service when he
makes payment to third party for the goods or servi
ces procured;
(ii) the recipient of service receives and us
es the goods or services so procured
by the service provider in his capacity as pure ag
ent of the recipient of
service;
(iii) the recipient of service is liable to ma
ke payment to the third party;
(iv) the recipient of service authorizes the s
ervice provider to make payment on
his behalf;
(v) the recipient of service knows that the g
oods and services for which payment
has been made by the service provider shall be pro
vided by the third party;
(vi) the payment made by the service provider
on behalf of the recipient of
service has been separately indicated in the invoic
e issued by the service
provider to the recipient of service;
(vii) the service provider recovers from the re
cipient of service only such amount
as has been paid by him to the third party; and
(viii)
the goods or services procured by the service provi
der from the third party as
a pure agent of the recipient of service are in add
ition to the services he
provides on his own account.
[Rule 5(2) of Service Tax (Dete
rmination of Value) Rules,2006)]
(F) Clarifications issued by the Board/Ministr
y:
Scope of Pandal or shamiana services :-
(1)
A person providing services, directly
or indirectly, in connection with preparation, arra
ngement, erection or decoration of a
pandal or shamiana (i.e. a place specially prepared
for organizing official, social or business
functions) is a ‘pandal or shamiana contractor’. S
ervice provided by him in any such
manner, including that or a caterer is liable to se
rvice tax under the category of ‘Pandal or
Shamiana Contractor Service.’
* * * * * * * *
(3) It is clarified that pandal/shaiana services p
rovided for pure religious
ceremonies or congregation for example, for worship
of Gods/goddesses, are not liable to
service tax. It is also clarified that in case a c
afé, hotels, restaurants etc. delivers food to
home and no charge, other than that for the cost of
the foods, is charged (i.e. free home
delivery) no service tax is leviable
( C.B.E.C. Circular No. 80/10/2004-ST dtd. 17.09.
04 )
(G) Exemption & Exclusion:
1. Exemption to Small Scale Service Providers:
In exercise of the powers conferred by sub-section
(1) of section 93 of the
Finance Act, 1994 (32 of 1994) (hereinafter referre
d to as the said Finance Act), the Central
Government, on being satisfied that it is necessary
in the public interest so to do, hereby
exempts taxable services of aggregate value not exc
eeding
Ten lakh*
rupees in any
financial year from the whole of the service tax le
viable thereon under section 66 of the said
Finance Act:
Provided that nothing contained in this notificatio
n shall apply to,-
(i) taxable services provided by a person un
der a brand name or trade name,
whether registered or not, of another pe
rson; or
(ii) such value of taxable services in respec
t of which service tax shall be paid by such
person and in such manner as specified under sub-se
ction (2) of section 68 of the
said Finance Act read with Service Tax Rules,1994.
2. The Exemption contained in this notification sha
ll apply subject to the following
conditions, namely:-
(i) the provider of taxable service has the opt
ion not to avail the Exemption contained in
this notification and pay service tax on the taxabl
e services provided by him and
such option, once exercised in a financial year, sh
all not be withdrawn during the
remaining part of such financial year;
(ii) the provider of taxable service shall not
avail the CENVAT credit of service tax paid on
any input services, under rule 3 or rule 13 of the
CENVAT Credit Rules, 2004 (herein
after referred to as the said rules), used for prov
iding the said taxable service, for
which Exemption from payment of service tax under t
his notification is availed of;
(iii) the provider of taxable service shall not
avail the CENVAT credit under rule 3 of the
said rules, on capital goods received in the premis
es of provider of such taxable
service during the period in which the service prov
ider avails Exemption from
payment of service tax under this notification;
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