Useful for CA CS CMA ICWA November/December 2015

2. Classification -Significance
 Taxability-- the correctness of classification of a
service determines the taxability or otherwise of a
particular service (since there is a Negative List too…)
 Exemption -- the benefits of exemption and
Abatements available to a particular service , may not
be available to other services
 Place of Provision -- the rules for determining the
Place of Provision are different for different services
(for Import & Export of Service)

3. Classification of Services[Sec.66F]
 1.Rules for Classification
 (a) No reference to Input Service
 (b) Specific Description [Sec 66F(2)]
 2.Bundled Service
 --- Element of provision of one service is combined
with an element(s) of provision of any other service(s)
 >>> Naturally bundled in the ordinary course of
business
 >>>NOT naturally bundled in the ordinary course of
business

4. Services bundled in the ordinary
course of business
 Treated as consisting entirely of such service
which determines the dominant nature of such a
bundle

5. Services NOT bundled in the
ordinary course of business
 Treated as consisting entirely of such service
which attracts the highest liability of Service Tax

6. Services bundled in the ordinary
course of business –How to
identify ???
 1. Subjective
 -- perception of the service Receiver
 -- rule of majority
 --nature of services
 --others (single package, Not available separately)
 2. NO Formula

7. Services bundled in the ordinary
course of business –examples
 1. Wiring & Telephone Instrument supplied by
Telecom Company
 2. Hotel 4 day-3 night
package…breakfast,lunch ,dinner,club etc
 3. Hotel booked for
conference…accommodation,food,business
center ,fitness center etc