Handout - National Tax Conference on Indirect Tax by ICAI on June 28 & 29 in Gurgaon

The Institute of Chartered Accountants of India
1National Conference on Indirect Taxes
Message from the President
It gives me immense pleasure to note that Indirect Taxes Committee of the Institute of Chartered
Accountants of India (ICAI) is organising a two days ‘National Conference on Indirect Taxes’ on
28th and 29th June 2014 jointly hosted by North India Regional Council (NIRC) and Gurgaon
Branch of NIRC of ICAI.
Various reforms have been carried out in the prevailing Indirect tax regime like introduction
of taxation of services at Central level and VAT at State level in the year 1994 and 2005
respectively. Further, the Government introduced taxation of services based on negative list
in the year 2012 with a view to rationalize the complex service tax law, augment revenues by
increasing the tax base, reduce litigation and pave the way for eventual transition to Goods
and Services Tax (GST) in the coming years. Since our profession figures prominently and
commands greater credibility, it is important for our members to regularly update their skills
with the developments in the area of taxation.
I am confident that the topics chosen for discussion at the National Conference are very useful
in current context and the eminent faculties will share their knowledge and experiences on
various issues in indirect taxes which would definitely benefit the members attending this
Conference.
I appreciate the efforts taken by CA. Atul Kumar Gupta, Chairman, CA. Nihar Niranjan
Jambusaria, Vice Chairman and other members of the Indirect Taxes Committee for keeping
members abreast with the latest developments taking place in the area of indirect taxes, by
way of organising seminars, conferences, webcasts, certificate courses and programmes on
indirect taxes.
I wish all the delegates a very fruitful, professionally enriching and truly value added experience.
With Warm Regards,
CA. K. Raghu
President
ICAI
ICAI MOBILE APP www.icaiknowledgegateway.org http://elearn.icai.org/ http://icaitv.com/

Message from the Vice -President
Despite the various reforms carried out in the past few years, the prevailing Indirect tax regime
in India is still in a state of evolution. The system is quite complex, with multi-layered levies
both at the Central and State levels. The existing regime requires businesses to undertake
careful upfront analysis of the tax costs involved in a transaction¸ ensure adequate backup
documentation to support their tax positions and constantly explore opportunities for tax
optimization. Further, India is committed to move towards uniform Goods and Services Tax
(GST) regime and this aspect needs to be factored in any significant tax approach developed
at present.
In the recent years, particularly after the introduction of service tax, the significance of indirect
taxes has also grown manifold. The area is continuously evolving and increasingly contributing
to the exchequer. The taxation laws are undergoing sweeping changes to cope up with
the emerging environment. Since our profession figures prominently and commands great
credibility, it is important for our members to regularly update their skills with the developments
in the area of taxation.
With a great delight, I commend the efforts of Indirect Taxes Committee of ICAI for organising
a two days “National Conference on Indirect Taxes” in Gurgaon on 28th & 29th June 2014. I
compliment CA. Atul Kumar Gupta, Chairman, CA. Nihar Niranjan Jambusaria, Vice Chairman
and other members of the Indirect Taxes Committee for the initiative. I also compliment
Northern India Regional Council and their Gurgaon branch for jointly hosting the programme.
I am sure that this Conference would help the members working in industry as well as in
practice in achieving and sustaining their competitive edge in the area of taxation. The
programme would also provide an opportunity to the members to identify and brainstorm the
burning issues and would enable them to understand and appreciate the instrumental role
played by the profession. I trust that the participants would be benefited from the knowledge
and expertise shared by the learned subject experts.
I wish the National Conference a resounding success.
CA. Manoj Fadnis
Vice-President
ICAI

Message from the Chairman
Taxation, in one form or another, as a source of revenue, is an ancient concept. The purpose of
taxation was meeting expenditure for fulfilling the various functions of the State and for public
welfare is also an equally old view. Both these ideas continue to be relevant fundamentals for
tax structures and systems of Nation States of the 21st Century.
In today’s context, the indirect taxes constitute a significant part of government’s revenue.
The system relating to indirect taxation in our country has been undergoing transformation
since 1991. This journey continued with introduction of service tax at central level, state value
added tax, TDS and is still continuing by way of various amendments made in the tax laws. The
country is now on the verge of implementing Goods and Services Tax and Direct Taxes Code to
underwrite the capacity of a nation to implement its development and welfare goals.
Indirect Tax laws in India are becoming more and more multifaceted on account of frequent
changes in taxation through Finance Acts, Notifications and Circulars. In order to keep pace
with the recurrent changes and increasing intricacies it is the need of the hour to profess our
members with a thorough knowledge of Indirect Tax Laws. Keeping these requirements in view
Indirect Taxes Committee is organizing a a two days “National Conference on Indirect Taxes”
at Gurgaon on 28th & 29th June 2014, being hosted by North India Regional Council of ICAI
with Gurgaon Branch of NIRC of ICAI.
The conference covers topics like Service Tax- taxability; reverse charge mechanism, refund,
export-import etc., CENVAT Credit Rules, Goods & Service Tax, Jurisprudence and much more.
This conference would be a unique opportunity to professionally upgrade oneself and have
an insight to contemporary issues on Indirect Taxes. I appreciate the efforts of Indirect Taxes
Committee for organising this conference and NIRC of ICAI and Gurgaon Branch for hosting
the same. Such joint efforts help us to keep up the image of ICAI and live up to its motto of
being a partner in Nation Building.
I wish this conference a booming success.
CA. Atul Gupta
Chairman
Indirect Taxes Committee

Message from the Vice-Chairman
Laws and rules relating to indirect taxes have been evolving on account of economic growth
of the country, global & technological advances and development in business models. Several
reforms have taken place in the last three decades in area of Indirect Taxes, particularly Service
Tax, by introduction of Negative List concept, Reverse charge etc. These developments help
to rationalize the multifarious tax laws, boost revenues by widening the tax base, reduce
litigation and make a way for GST implementation.
The reforms in the service tax regime help our members with fresh prospects and opportunities.
In order to bank upon these opportunities members need to update their knowledge to meet
the market expectations, manage tax risks and add value to the profession or organization
they serve. Taking this into account the Indirect taxes Committee of ICAI is organizing two days
‘National Conference on Indirect Taxes’ on 28th and 29th June 2014 jointly hosted by North
India Regional Council and Gurgaon Branch of NIRC of ICAI. I am sure that this Conference
would help the members working in industry as well as in practice in achieving and sustaining
their competitive edge in the area of services tax.
I am appreciative of the thought and care that has gone in selection of topics, which are
very contemporary in nature and appealing the members to participant in the Conference.
Further, with the knowledgeable and experienced faculty and eager participants, I am sure
that deliberation at the conference would be beneficial. Above all, I am pleased and respect
the zest to learn of the participants who have spared time out of their hectic daily schedules
to participate in the Conference.
I would like to acclaim the efforts undertaken by the Indirect Taxes Committee along with NIRC
of ICAI and Gurgaon Branch to organize this conference. I sincerely wish that the participants
of the conference make good of this opportunity and have a wonderful learning experience.
Wishing you all a professionally enthralling experience.
CA. Nihar Niranjan Jambusaria
Vice-Chairman
Indirect Taxes Committee

Message from the Chairman, NIRC of ICAI
Dear Professional Colleagues,
It gives me immense pleasure to note that the Indirect Tax Committee of ICAI is organizing a
National Conference on Indirect Tax which is being hosted by Northern India Regional Council
of the ICAI with Gurgaon Branch of NIRC of ICAI on 28th & 29th June 2014 at Hotel Crown
Plaza, Gurgaon.
In today’s dynamic business environment wherein the policies and procedures are undergoing
massive changes both at micro and macro level, it becomes very essential for our members
to pace up with the latest developments in the areas of relevance to the profession. The
reforms in the Service Tax Regime have been increasingly throwing up newer challenges and
opportunities for our members. It has always been an endeavor of our profession to equip
our fellow brethren with latest knowledge and update so as to enable them to carry out the
assigned responsibilities with excellence. Conferences, Seminars and similar programmes also
conducted by ICAI to facilitate Continuous Professional Education and to offer a platform for
interaction among Members to share and benefit from diverse experiences and vision.
The Indian Taxation system, particularly under Indirect Taxes structure, has been evolving on
account of major economic developments. The New Government is going to present its Union
Budget on 10th July. To be prepared for upcoming opportunities and challenges, it is necessary
for the members to update their knowledge to meet the requirements. We as Chartered
Accountants would be looked upon to assume a leadership role and identify the opportunities
for improvements. In order to prepare for the upcoming challenges and to be abreast with the
regime of Indian Taxation, National Conference on Indirect Tax is being organized under the
aegis of Indirect Taxes Committee of ICAI. I on behalf of NIRC take this opportunity to thank
for your participation in the Conference.
I would like to appreciate the efforts of CA. Atul Kumar Gupta, Chairman, Indirect Taxes
Committee, CA. Nihar Niranjan Jambusaria, Vice-Chairman, Indirect Taxes Committee, as well
as other Members of the Committee for giving NIRC of ICAI and Gurgaon Branch of NIRC of
ICAI the privilege of hosting this Conference.
I wish the Conference a Grand Success.
CA. Radhey Shyam Bansal
Chairman
NIRC of ICAI

Message from the Chairman, Gurgaon Branch of NIRC of ICAI
Indirect tax Committee, ICAI deserves credit for not only organizing such an important
conference on “National Conference on Indirect Taxes” but also needs to be complimented
for suitably timing the conference. As we all know, due to change of Govt. at the centre and
commitment of the new govt. to work towards the GST structure of taxes replacing a plethora
of taxes at the centre and state level, indirect taxes will be a great opportunity for Chartered
Accountant Profession in the coming future. By virtue of such initiatives from ICAI, Chartered
Accountants will be much better placed to cope with the changes in indirect taxation field.
Upcoming Budget Session of Parliament is a few weeks away and I think the conference
is ideally timed to serve the members with various backgrounds and the latest updates on
Indirect taxes and the road ahead in this field specially GST.
A professional has to be always updated to succeed in his area of specialization. In the ever
changing taxation environment, regular updation becomes much more important for a
Chartered Accountant. It is my firm belief that Members at large and specially Gurgaon Branch
Members will immensely benefit from this conference by actively participating in the event.
The conference as part of several initiatives of the Indirect Tax Committee will not only help in
maintaining but also improve upon the competitive edge of CA fraternity in the area of indirect
taxes.
My Sincere thanks to ICAI and indirect tax committee of ICAI for choosing Gurgaon as
the centre for “National Conference on Indirect Taxes” and allowing Gurgaon Branch the
opportunity to be the Co-host of such an important conference.
We are committed to make the conference a grand success with the member’s active
participation.
Best Wishes
CA. Rajiv Dagar
Chairman
Gurgaon Branch of NIRC of ICAI

Message

Government Nominee
CA. Anuj GoyalCA. Abhijit Bandyopadhyay
CA. Dhinal Ashvinbhai Shah
CA. Mukesh Singh Kushwah
CA. Prafulla Premsukh Chhajed
CA. Sanjiv Kumar Chaudhary
CA. Sumantra Guha
CA. Atul Kumar Gupta
CA. J. Venkateswarlu
CA. S. Santhana Krishnan
CA. Shriniwas Yeshwant Joshi
CA. V. Murali
CA. Babu Abraham Kallivayalil
CA. Jay Ajit Chhaira
CA. Nilesh Shivji Vikamsey
CA. Sanjay Agarwal
CA. Shyam Lal Agarwal
CA. Vijay Garg
CA. Charanjot Singh Nanda
CA. M. Devaraja Reddy
CA. Pankaj Inderchand Jain
CA. Sanjeev K. Maheshwari
CA. Subodh Kumar Agrawal
CA. Vijay Kumar Gupta
CA. K. Raghu
President, ICAI
CA. Manoj Fadnis
Vice President, ICAI
CA. G. Sekar
CA. Naveen N.D. Gupta
CA. Rajkumar S. Adukia
CA. Shiwaji Bhikaji Zaware
CA. Tarun Jamnadas Ghia
Shri Bhaskar Chatterjee Shri Sidharth K BirlaShri Salil SinghalShri Manoj KumarShri J S DeepakShri Gautam Guha Shri Sunil Kanoria
Members of the Twenty Second Council

Members of the Indirect Taxes Committee for 2014 - 15
CA. Sanjay Agarwal
CA. Jay Ajit Chhaira CA. Dhinal Ashvinbhai Shah CA. G. Sekar CA. Vijay GargCA. J. Venkateswarlu
CA. Anuj Goyal CA. Naveen N.D. Gupta Shri J S Deepak Shri Salil SinghalDr. Bhaskar Chatterjee
Co-opted Members
CA. Keshava M S CA. P. Rajendra Kumar CA. Raghuraman V CA. Madhukar
N. Hiregange
CA. Ashokkumar Mahabala
Shetty
Special Invitee
CA.Gaurav Gupta CA. Ashwani Gupta CA. Arun Ahuja
CA. Kapil BhagirathCA. Himanshu Srivastava CA. Upender Gupta
CA. Atul Kumar Gupta
Chairman
Vice-Chairman
CA. K. Raghu
President, ICAI
CA. Manoj Fadnis
Vice President, ICAI

CA. Radhey Shyam Bansal
Chairman, NIRC of ICAI
CA. Manoj Kumar Bansal
Vice-Chairman, NIRC of ICAI
CA. Swadesh Gupta
Secretary, NIRC of ICAI
CA. Rajesh Kumar Agrawal
Treasurer, NIRC of ICAI
CA. Raj Chawla
NICASA Chairman, NIRC of ICAI
CA. Harit Agrawal
NICASA Member, NIRC of ICAI
CA. Yogita Anand
NICASA Member, NIRC of ICAI
CA. Vishal Garg
Executive Member, NIRC of ICAI
CA. Deepak Garg
CA. Gopal Kumar Kedia
Member, NIRC of ICAI
CA. Hans Raj Chugh
CA. Rajinder Narang
CA. Pramod Kumar Maheshwari
Member, NIRC of ICAI
NIRC Team

CA. Rajiv Dagar
Chairman
CA. Pardeep Kumar Lakhani
Vice-Chairman
CA. Sanjay Goyal
Secretary
CA. Naveen Garg
Treasurer
CA. Vikas Goyal
Executive Member
CA. Suresh Chawla
Executive Member
CA. Lalit Jain
Executive Member
CA. Sanjay Kumar Agrawal
Executive Member
MANAGING COMMITTEE MEMBERS OF
GURGAON BRANCH 2014 – 15

TOGETHER WE CAN
Message from Committee Members of Gurgaon Branch
It is a moment of proud and immense pleasure for us at Gurgaon Branch of NIRC of ICAI to host the National Conference
on Indirect Tax. This is the first National Conference on Indirect Tax in Northern India Region. We at the National Conference
on Indirect Taxation at Gurgaon have a rich legacy of inviting the best speakers from across the country and imparting rich
and valuable knowledge to the delegates.
We, the team at Gurgaon branch is completely and deeply dedicated to its members and we try our best to make available
best and up to date of the knowledge to our members. In the same endeavour we requested Indirect Tax Committee
to provide us support to conduct this National Conference, who accepted our request and gave us this opportunity to
host the National Level Programme. We are grateful, to the Indirect Tax Committee for providing us Support and this
opportunity and also to NIRC of ICAI to be the Co-host of this Programme.
We are especially thankful to the President, Vice President of the Institute of Chartered Accountants of India who have
spared their time to be the part of this Programme and also the Chairman of Indirect Tax Committee who has motivated
us to initiate such a large programme.
We are quite hopeful that, with the support of Indirect Tax Committee, Northern India Regional Council, Members of
Gurgaon Branch, this conference will be a grand success and this National Conference Programme will enlighten our
members at large with the excellent knowledge shared by the esteemed Speakers.

NATIONAL CONFERENCE ON
INDIRECT TAXES
22 National Conference on Indirect Taxes
PROFILE
The Institute of Chartered Accountants of India (ICAI)
The Institute of Chartered Accountants of India (ICAI) is a statutory body established under the Chartered Accountants
Act, 1949 for the regulation of the profession of Chartered Accountants in India. During more than six decades of its
existence the role of the Institute of Chartered Accountants of India (ICAI) has evolved and expanded to meet the growing
needs and new challenges. At present, the ICAI has 5 Regional Councils, 138 branches covering the length and breadth
of country and 24 Chapters abroad. The member base of ICAI is more than 2.25 lacs and the student base exceeds 8.5
lacs. Today ICAI has grown manifold and has created a vast pool of Chartered Accountants, essential for every sphere of
the country’s economy, industry, business and good governance.
Indirect Taxes Committee of icai
Indirect Taxes Committee is one of the most important Non-Standing Committee. Its main function include examining
indirect tax laws, rules, regulations, circulars, notifications etc which may be enacted or issued from time to time
by Government , sending suggestion for improvements in respective legislation and offering pre- budget and post-
budget suggestions/ comments. Another important function of the committee is to enhance the awareness and share
the knowledge relating to indirect taxes by organizing workshops, seminars, e-learning and interactive programmes
independently also with trade and industry.
Gurgaon Branch of NIRC of ICAI
Gurgaon Branch of NIRC of ICAI was established in the year 2000. The Journey of the Branch was started with a very
small set up and few number of members and an office from the office of then chairman to a rented premises of 3000
Sq. ft. now. Gurgaon is a hub for 9000 members including 4000 registered members and Aprox. 5000 Non-registered
members mostly working in the industry. There is currently Approx. 12000 students directly or indirectly associated with
the branch. Above strong strength of members and students has made Gurgaon Branch as Mega branch which is the
only mega branch in Northern Region and also one of the largest branch in India.
Now we are planning to shift to a bigger space and planning to acquire modern and bigger infrastructure commensurate
to the personality of Gurgaon as millennium city and hub for aprox. 20000 professionals or to be professionals.
We at Gurgaon Branch engaged in lots of members & student related activities which include Various Professional /
Technical Programms like Seminars on various law matters, Group Discussions, Post Qualifications Courses, National
Conferences and Training Programms. We also tries to touch upon various points which really matters in day to day life
of our members like spiritual activities, sports activities, family get to gathers and activities for common cause of society.
Branch is also doing lots activities and providing various support and service to its students which include:
1. Coordinating various exams.
2. Orientation programs
3. GMCS Courses,
4. Education Quizzes,
5. Information Technology Training,
6. Having its own sale counter for the sale of Institute’s various publications and forms.
7. Branch is equipped with good library for the benefits of its members and students.
It is because of the great efforts of the various managing committees, Gurgaon branch is able to achieve various mile
stone and is very active in carrying its activities with great zeal. The branch is able to win various awards and recognitions
due to tremendous efforts of managing committees as a team which includes Best Branch Award in the year 2008 and
Commendable Performance Award in the year 2013-14 in Northern Region, Runner up trophy in the Cricket Tournament
conducted by NIRC in the year 2013-14.

About the Conference
The Institite of Chartered Accountants of India (ICAI) has been instrumental in providing quality and continuous
professional education to its members. The ICAI being amongst the largest accounting bodies in the world has always
endeavored to position brand Indian Chartered Accountants at a global level.
As a part of continuous professional development of its members and its aim to be a partner in nation building, the
Indirect Taxes Committee of ICAI is organising a two days “National Conference on Indirect Taxes” on 28th & 29th June
2014 at Hotel Crown Plaza, Gurgaon being hosted by North India Regional Council(NIRC) of ICAI along with Gurgaon
branch of NIRC of ICAI.
Given the stature of the event and the range of the topics to be deliberated, the Conference would be a unique
opportunity to access the emergence of new thought process on contemporary issues of Indirect Taxes and to upgrade
onself professionally. The conference is timed very appropriately to help members be updated with the current scenario
of indirect taxes in India before the upcoming budget 2014-15.

INDIRECT TAXES
MILESTONES OF Indirect Taxes Committe
The Indirect Taxes Committee is one of the key non-standing committees of ICAI. Following are some of the significant
achievements of the Committee:
• Key Player in case of Changes in Law: The Indirect Taxes Committee of ICAI submits the representation to the
Government whenever major changes are announced/ notified by the Government. Like the Committee had submitted
its suggestions when the concept paper on taxation of services based on a negative list of services was offered for
comments. Large no. of suggestions of ICAI was accepted by the Government.
Further, the Committee play a key role in creating awareness about such major change in the law to the members
by organising seminar, conferences as also Certificate Course.
• Webcast on various aspects of Indirect Taxes: The Committee has been organising monthly webcast on various
topics of Indirect Taxes. It may be mentioned that the then Hon’ble Finance Minister Shri P. Chidambram had addressed
in one of the webcast organised on VCES, 2013 on 16th December, 2013
• Pre & Post Budget Suggestions: Every year, the Indirect Taxes Committee of ICAI submit Pre-Budget Memorandum
to the Government containing suggestions to improve tax collection, reduce/minimize litigations, rationalize
provisions of taxation laws and remove administrative and procedural difficulties. After the budget is released by the
Government, the Committee submits Post Budget Memorandum containing suggestion for removing the practical
difficulties which may arise in implementing budget proposals and seeking the clarifications on provisions if any.
• Training of Government Officials: The Indirect Taxes Committee of ICAI is committed to live up to the ICAI’s motto
of being a partner in nation building. The committee has been organising various training programmes for the
officials of CBEC to train the officials with accounting and auditing aspects. This helps with better compliance of
indirect tax laws and bridges the gap of understanding between the officials and the assessees.
• Certificate Course on Indirect Taxes: The Indirect Taxes Committee of ICAI has been organising the Certificate Course
on Indirect Taxes since 2011 in order to provide in depth knowledge of indirect taxes to the members of ICAI with the
help of eminent and learned faculties from the profession and department.
• Programmes/ Seminars/ Conferences: The Indirect Taxes Committee of ICAI has been regularly organising
Programmes/ Seminars/ Conferences/ Webcasts on Indirect Taxes in order to help members as well as non members
to align with the developments in the indirect tax laws.

INDIRECT TAXES COMMITTEE ACTION PLAN FOR 2014-15
The Action Plan of the Indirect Taxes Committee for the year 2014-15 is as follows:
1. To develop a road map to shift from need based learning to aim based learning.
2. To empower & encourage more and more Chartered Accountants to take up indirect taxation as a professional
specialization.
3. To play a key role in formulation and implementation of GST by having a thought leadership on the subject.
4. To convert the working of Indirect Taxes Committee as “Paper-less working”, by using online utility.
5. To assist Central Board of Excise and Customs, (CBEC), Ministry of Finance by offering technical inputs in the form
of representation, pre & post Budget Memoranda and helping them in capacity building by imparting training for
their officials.
6. To initiate for organising programme with Chamber of commerce, other Ministries etc.
7. To assist Board of Studies (BOS) of ICAI in imparting training related to indirect taxes for Students.
8. To provide online knowledge of indirect taxes by organising monthly webcast on the subject in sequential way.
9. To provide a facility of anytime, anywhere learning at a click of mouse by launching of E-learning Modules on
Service Tax, Custom, Excise and CST at a nominal fee of Rs.500.
10. To inculcate research among members and students by inviting research based material from them which may be
developed as guidance note on various subjects/topics related to Indirect taxes.
11. To organise National, International Conference and Residential/Non- residential Workshops coupled with mock-
tribunal for updating Member’s knowledge.
12. To submit a representation for introducing Service Tax Audit under Finance Act, 1994 on the line of Tax Audit under
Income-tax Act.
13. To make effort for setting up Bar Room for Chartered Accountants at Central/State Commissionerates .

INDIRECT TAXES
GLIMPSE OF GURGAON
Historical Background
The origin of the city’s name is steeped in Hindu mythology. Originally Gurgaon was named Guru Gram or Guru Gaon,
which means the village of the teacher. In the Sanskrit language, Guru means teacher, and Gram or Gaon means a village.
In this case, the teacher refers to Guru Dronacharya. This is said to be the land where Guru Dronacharya taught archery
to the Pandavas.
Location
Gurgaon is a city in haryana and is a leading financial and industrial center, situated in the National Capital Region near
the Indian capital New Delhi, Located 19.9 miles (32 km) south-west of New Delhi.
Industrial Development
Gurgaon is the one of the fastest growing cities in the world. Once a small dusty agricultural village, Gurgaon has
now emerged to become the city with the first highest per capita income in India. Popularly known as Millennium City,
Gurgaon has the presence of about 250 or 50% of the Fortune 500 companies. In recent times, Gurgaon has become
home to offices of numerous MNCs, and emerged as the hub of IT and several other modern businesses.
In this city that barely existed two decades ago, there are many shopping malls, seven golf courses and luxury shops
selling Chanel and Louis Vuitton. Mercedes-Benzes and BMWs shimmer in automobile showrooms. Apartment towers
are sprouting like concrete weeds, and a futuristic commercial hub called Cyber City houses many of the world’s most
respected corporations. Gurgaon’s proximity to Delhi means easy access to political decision makers. Maurti Suzuki
Private Limited was the first company that set up a manufacturing unit in the city in 1970s making cars. Eventually, DLF
Limited, a real estate company acquired vast stretches of land in the city. The first major American brand to set up a unit
in Gurgaon was General Electric in 1997, and is regarded as the first foreign company in India that was established for
outsourcing software work. GE’s setup in Gurgaon prompted other companies, both international as well as domestic,
to follow suit. Today, Gurgaon has emerged as one of the most important offshoring centers in the world, providing
outsourcing solutions in software, IT, service and sales through delivery facilities and call centers. Apart from Business
process outsourcing and IT sectors, the city is home to several other companies that specialize in domain expertise.
Siemens Industry Software, in Gurgaon Business Park, made a portfolio of design software that was used by NASA
to digitally design, simulate and assemble the vehicle before any physical prototypes were built. Various international
companies, including Coca-Cola, Pepsi, IBM, American Express, Agilent Technologies, Microsoft, and Bank of America,
have chosen Gurgaon to be their Indian corporate headquarters. Retail is an important industry in Gurgaon, with the
presence of many shopping malls. Real estate is a major force in the city’s economy. Gurgaon is home to some of the
nation’s most valuable real estate.
Airport
Gurgaon is served by Indira Gandhi International Airport, though the airport is just outside the city limits and located
within the jurisdiction of Delhi near National Highway 8. The airport is one of the busiest airports in India and provides
domestic and international air connectivity.
Tourist Place
There are no historical monuments like Delhi, no beaches like Goa, no mountains & valleys like Shimla & Manali, but it has
something differ than others. Gurgaon tourist attractions blended with national park, western style gardens, shopping
malls, entertainment theatre & leisure, and its vibrant nightlife with appealing party places & nightclubs which makes it
one of the most visited places near Delhi/NCR for travel, highly prefer by young generation of India. You can find there
lot of tourist places to visit any time of the day, month and year.
Gurgaon has number of tourist place to visit list below is just an illustrative list:
1) Sheetla Mata Mandir 2) Damdama Lake 3) Kingdom of Dreams
4) Sultanpur bird Century 5) Leisure Valley Park 6) Apno Ghar
7) Fun & Food Village 8) CRPF Shooting Range

INDEX
Subject Speaker Pg. No.
INTERACTIONS WITH LEADERS CA. K. Raghu
President ICAI
CA. Manoj Fadnis
Vice-President ICAI
1st
Technical Session:
Making of Negative list and Challenges ahead
Sh. V.K. Garg
Former Joint Secretary, TRU
31
2nd
Technical Session:
Jurisprudence and how to represent before authorities
CA. D N Panda
Member, CESTAT
49
3rd
Technical Session:
CENVAT Credit Rules, 2004
Sh. Amresh Jain
Addl. Commissioner
Authorized Representative, CESTAT
59
4th
Technical Session:
GST
Sh. Sujit Ghosh
Advocate
89
5th
Technical Session:
Reverse Charge Mechanism
CA. Upender Gupta
Addl. Commissioner, CBEC
97
6th
Technical Session:
Valuation under Service Tax
CA. Pankaj Vasani
Taxation-Head, Vodafone
109
7th
Technical Session:
Service Tax on Works Contract
Service Tax on Real Estate Sector
CA. Atul Gupta
Chairman, Indirect Taxes Committee
125
8th
Technical Session:
Refund Under Service Tax
CA. Rohini Aggarwal 133
9th
Technical Session:
Export and Import of Services
CA. Bimal Jain 173

1st
Technical Session:
Topic
Making of Negative list and
Challenges ahead
Speaker
Sh. V. K. Garg
Former Joint Secretary, TRU

INDIRECT TAXES
Notes...

Sh. VK Garg
V K Garg has recently taken voluntary retirement from government service and was last serving as Joint Secretary with
the Ministry of Finance in India heading its Tax Research Unit. He was also a key member of the team assigned with the
task of implementing GST in India. He is presently involved in an advisory capacity on key issues relating to indirect taxes.
He is the university topper in Bachelor in Commerce from Punjab University, Chandigarh. He later did his post graduation
in management from Indian Institute of Management- Ahmedabad in 1980 and is also a law graduate from Symbiosis
Institute from Pune.
During the course of his career he has done his fellowship in Management with World Customs Organization, Brussles
and an Executive Programme on Public Sector Leadership and Management from Lee Kuan Yew (LKY) School of Public
Policy, Singapore. He has also done training with HM Customs, New York Customs and a course on Money laundering
with Hong Kong Police.
He started his career with private sector for a few years and later joined the Indian Revenue Service in 1983. He has nearly
30 years experience in the design and implementation of indirect tax laws, international cooperation, trade facilitation,
bi-lateral treaties and agreements
He has travelled to many countries in Europe, Canada, Japan, New Zealand, and Singapore to study GST and has actively
participated in Working Party 9 of OECD, which deals with consumption taxes.
He has authored two books, including one on Service Tax Law: a new age compendium.
Mr. Garg is the recipient of the President of India Award for distinguished record of service on the occasion of Republic
Day 1999.

INDIRECT TAXES
SERVICE TAX — STATUTORY PROVISIONS-
Taxability of Services
(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) such transfer, delivery or supply of any goods which is deemed to be a sale within the meaning of clause
(29A) of article 366 of the Constitution; or
(iii) 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 clause, transaction in money shall not include any activity relating to the use
of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form,
currency or denomination for which a separate consideration is charged.
Explanation 3. — 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 4. — 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;
SECTION 66B. Charge of service tax on and after Finance Act, 2012
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.
SECTION 66C. Determination of place of provision of service
(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.
SECTION 66D. Negative list of services
The negative list shall comprise of the following services, namely :—
(a) services by Government or a local authority excluding the following services to the extent they are not covered
elsewhere—
(i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency
services provided to a person other than Government;
(ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;
(iii) transport of goods or passengers; or
(iv) support services, other than services covered under clauses (i) to (iii) above, provided to business entities;
(b) services by the Reserve Bank of India;
(c) services by a foreign diplomatic mission located in India;
(d) services relating to agriculture or agricultural produce by way of—
(i) agricultural operations directly related to production of any agricultural produce including cultivation,
harvesting, threshing, plant protection or testing;
(ii) supply of farm labour;
(iii) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning,
trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations
which do not alter the essential characteristics of agricultural produce but make it only marketable for the
primary market;
(iv) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use;
(v) loading, unloading, packing, storage or warehousing of agricultural produce;
(vi) agricultural extension services;
(vii) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission
agent for sale or purchase of agricultural produce;
(e) trading of goods;
(f) any process amounting to manufacture or production of goods;
(g) selling of space or time slots for advertisements other than advertisements broadcast by radio or television;
(h) service by way of access to a road or a bridge on payment of toll charges;
(i) betting, gambling or lottery;
(j) admission to entertainment events or access to amusement facilities;
(k) transmission or distribution of electricity by an electricity transmission or distribution utility;
(l) services by way of—
(i) pre-school education and education up to higher secondary school or equivalent;
(ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in
force;
(iii) education as a part of an approved vocational education course;
(m) services by way of renting of residential dwelling for use as residence;
(n) services by way of—

INDIRECT TAXES
(i) extending deposits, loans or advances in so far as the consideration is represented by way of interest or
discount;
(ii) inter se sale or purchase of foreign currency amongst banks or authorised dealers of foreign exchange or
amongst banks and such dealers;
(o) service of transportation of passengers, with or without accompanied belongings, by—
(i) a stage carriage;
(ii) railways in a class other than—
(A) first class; or
(B) an airconditioned coach;
(iii) metro, monorail or tramway;
(iv) inland waterways;
(v) public transport, other than predominantly for tourism purpose, in a vessel between places located in India;
and
(vi) metered cabs, radio taxis or auto rickshaws;
(p) services by way of transportation of goods—
(i) by road except the services of—
(A) a goods transportation agency; or
(B) a courier agency;
(ii) by an aircraft or a vessel from a place outside India up to the customs station of clearance in India; or
(iii) by inland waterways;
(q) funeral, burial, crematorium or mortuary services including transportation of the deceased.
SECTION 66E. Declared services
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 (20 of 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 or development 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.
SECTION 66F. Principles of interpretation of specified descriptions of services or bundled services
(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 combined with an element or elements of provision of
any other service or services.
Mega Notification
Notification No. 25/2012-S.T. dated 20-06-2012
In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter
referred to as the said Act) and in supersession of notification number 12/2012-Service Tax, dated the 17th March, 2012,
published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 210(E), dated the
17th March, 2012, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby
exempts the following taxable services from the whole of the service tax leviable thereon under section 66B of the said
Act, namely :-
1. Services provided to the United Nations or a specified international organization;
2. Health care services by a clinical establishment, an authorised medical practitioner or para-medics;
2A. Services provided by cord blood banks by way of preservation of stem cells or any other service in relation
to such preservation
3. Services by a veterinary clinic in relation to health care of animals or birds;
4. Services by an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961) by way of charitable
activities;
5. Services by a person by way of -
(a) renting of precincts of a religious place meant for general public; or
(b) conduct of any religious ceremony;

INDIRECT TAXES
6. Services provided by-
(a) an arbitral tribunal to -
(i) any person other than a business entity; or
(ii) a business entity with a turnover up to rupees ten lakh in the preceding financial year;
(b) an individual as an advocate or a partnership firm of advocates by way of legal services to,-
(i) an advocate or partnership firm of advocates providing legal services ;
(ii) any person other than a business entity; or
(iii) a business entity with a turnover up to rupees ten lakh in the preceding financial year; or
(c) a person represented on an arbitral tribunal to an arbitral tribunal;
7. Services by way of technical testing or analysis of newly developed drugs, including vaccines and herbal remedies,
on human participants by a clinical research organisation approved to conduct clinical trials by the Drug Controller
General of India;
8. Services by way of training or coaching in recreational activities relating to arts, culture or sports;
9. Services provided to an educational institution in respect of education exempted from service tax, by way of,-
(a) auxiliary educational services; or
(b) renting of immovable property;
9A. Any services provided by, -
(i) the National Skill Development Corporation set up by the Government of India;
(ii) a Sector Skill Council approved by the National Skill Development Corporation;
(iii) an assessment agency approved by the Sector Skill Council or the National Skill Development Corporation;
(iv) a training partner approved by the National Skill Development Corporation or the Sector Skill Council in
relation to (a) the National Skill Development Programme implemented by the National Skill Development
Corporation; or (b) a vocational skill development course under the National Skill Certification and Monetary
Reward Scheme; or (c) any other Scheme implemented by the National Skill Development Corporation
10. Services provided to a recognised sports body by-
(a) an individual as a player, referee, umpire, coach or team manager for participation in a sporting event organized
by a recognized sports body;
(b) another recognised sports body;
11. Services by way of sponsorship of sporting events organised,-
(a) by a national sports federation, or its affiliated federations, where the participating teams or individuals
represent any district, State, zone or Country;
(b) by Association of Indian Universities, Inter-University Sports Board, School Games Federation of India, All India
Sports Council for the Deaf, Paralympic Committee of India or Special Olympics Bharat;
(c) by Central Civil Services Cultural and Sports Board;
(d) as part of national games, by Indian Olympic Association; or
(e) under Panchayat Yuva Kreeda Aur Khel Abhiyaan (PYKKA) Scheme;
12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection,
commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of -
(a) a civil structure or any other original works meant predominantly for use other than for commerce, industry,
or any other business or profession;
(b) a historical monument, archaeological site or remains of national importance, archaeological excavation, or

antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of
1958);
(c) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment;
(d) canal, dam or other irrigation works;
(e) pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal; or
(f) a residential complex predominantly meant for self-use or the use of their employees or other persons specified
in the Explanation 1 to clause 44 of section 65B of the said Act;
13. Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair,
maintenance, renovation, or alteration of,-
(a) a road, bridge, tunnel, or terminal for road transportation for use by general public;
(b) a civil structure or any other original works pertaining to a scheme under Jawaharlal Nehru National Urban
Renewal Mission or Rajiv Awaas Yojana;
(c) a building owned by an entity registered under section 12AA of the Income tax Act, 1961(43 of 1961) and
meant predominantly for religious use by general public;
(d) a pollution control or effluent treatment plant, except located as a part of a factory; or
(e) a structure meant for funeral, burial or cremation of deceased;
14. Services by way of construction, erection, commissioning, or installation of original works pertaining to,-
(a) an airport, port or railways, including monorail or metro;
(b) a single residential unit otherwise than as a part of a residential complex;
(c) low-cost houses up to a carpet area of 60 square metres per house in a housing project approved by competent
authority empowered under the ‘Scheme of Affordable Housing in Partnership’ framed by the Ministry of
Housing and Urban Poverty Alleviation, Government of India;
(d) post-harvest storage infrastructure for agricultural produce including a cold storages for such purposes; or
(e) mechanised food grain handling system, machinery or equipment for units processing agricultural produce as
food stuff excluding alcoholic beverages;
15. Services provided by way of temporary transfer or permitting the use or enjoyment of a copyright,-
(a) covered under clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957 (14 of 1957), relating to
original literary, dramatic, musical or artistic works; or
(b) of cinematograph films for exhibition in a cinema hall or cinema theatre;”;
16. Services by a performing artist in folk or classical art forms of (i) music, or (ii) dance, or (iii) theatre, excluding services
provided by such artist as a brand ambassador;
17. Services by way of collecting or providing news by an independent journalist, Press Trust of India or United News of
India;
18. Services by way of renting of a hotel, inn, guest house, club, campsite or other commercial places meant for
residential or lodging purposes, having declared tariff of a unit of accommodation below rupees one thousand per
day or equivalent;
19. Services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, other than
those having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during
the year;
19A. Services provided in relation to serving of food or beverages by a canteen maintained in a factory covered under the
Factories Act, 1948 (63 of 1948), having the facility of air-conditioning or central air-heating at any time during the
year
20. Services by way of transportation by rail or a vessel from one place in India to another of the following goods -

INDIRECT TAXES
(a)
(b) relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap;
(c) defence or military equipments;
(d) ;
(e) ;
(f) newspaper or magazines registered with the Registrar of Newspapers;
(g) railway equipments or materials;
(h) agricultural produce;
(i) foodstuff including flours, tea, coffee, jaggery, sugar, milk products, salt and edible oil, excluding alcoholic
beverages; or
(j) chemical fertilizer and oilcakes;
21. Services provided by a goods transport agency, by way of transport in a goods carriage of,-
(a) agricultural produce;
(b) goods, where gross amount charged for the transportation of goods on a consignment transported in a single
carriage does not exceed one thousand five hundred rupees;
(c) goods, where gross amount charged for transportation of all such goods for a single consignee does not
exceed rupees seven hundred fifty;
(d) foodstuff including flours, tea, coffee, jaggery, sugar, milk products, salt and edible oil, excluding alcoholic
beverages;
(e) chemical fertilizer and oilcakes;
(f) newspaper or magazines registered with the Registrar of Newspapers;
(g) relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap; or
(h) defence or military equipments;
22. Services by way of giving on hire -
(a) to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers; or
(b) to a goods transport agency, a means of transportation of goods;
23. Transport of passengers, with or without accompanied belongings, by -
(a) air, embarking from or terminating in an airport located in the state of Arunachal Pradesh, Assam, Manipur,
Meghalaya, Mizoram, Nagaland, Sikkim, or Tripura or at Bagdogra located in West Bengal;
(b) a contract carriage for the transportation of passengers, excluding tourism, conducted tour, charter or hire; or
(c) ropeway, cable car or aerial tramway;
24. ;
25. Services provided to Government, a local authority or a governmental authority by way of -
(a) carrying out any activity in relation to any function ordinarily entrusted to a municipality in relation to water
supply, public health, sanitation conservancy, solid waste management or slum improvement and upgradation;
or
(b) repair or maintenance of a vessel;
26. Services of general insurance business provided under following schemes -
(a) Hut Insurance Scheme;
(b) Cattle Insurance under Swarnajaynti Gram Swarozgar Yojna (earlier known as Integrated Rural Development
Programme);

(c) Scheme for Insurance of Tribals;
(d) Janata Personal Accident Policy and Gramin Accident Policy;
(e) Group Personal Accident Policy for Self-Employed Women;
(f) Agricultural Pumpset and Failed Well Insurance;
(g) premia collected on export credit insurance;
(h) Weather Based Crop Insurance Scheme or the Modified National Agricultural Insurance Scheme, approved by
the Government of India and implemented by the Ministry of Agriculture;
(i) Jan Arogya Bima Policy;
(j) National Agricultural Insurance Scheme (Rashtriya Krishi Bima Yojana);
(k) Pilot Scheme on Seed Crop Insurance;
(l) Central Sector Scheme on Cattle Insurance;
(m) Universal Health Insurance Scheme;
(n) Rashtriya Swasthya Bima Yojana; or
(o) Coconut Palm Insurance Scheme;
26A. Services of life insurance business provided under following schemes -
(a) Janashree Bima Yojana (JBY); or
(b) Aam Aadmi Bima Yojana (AABY);”.
27. Services provided by an incubatee up to a total turnover of fifty lakh rupees in a financial year subject to the
following conditions, namely :-
(a) the total turnover had not exceeded fifty lakh rupees during the preceding financial year; and
(b) a period of three years has not been elapsed from the date of entering into an agreement as an incubatee;
28. Service by an unincorporated body or a non-profit entity registered under any law for the time being in force, to its
own members by way of reimbursement of charges or share of contribution -
(a) as a trade union;
(b) for the provision of carrying out any activity which is exempt from the levy of service tax; or
(c) up to an amount of five thousand rupees per month per member for sourcing of goods or services from a third
person for the common use of its members in a housing society or a residential complex;
29. Services by the following persons in respective capacities -
(a) sub-broker or an authorised person to a stock broker;
(b) authorised person to a member of a commodity exchange;
(c) mutual fund agent to a mutual fund or asset management company;
(d) distributor to a mutual fund or asset management company;
(e) selling or marketing agent of lottery tickets to a distributer or a selling agent;
(f) selling agent or a distributer of SIM cards or recharge coupon vouchers;
(g) business facilitator or a business correspondent to a banking company or an insurance company, in a rural
area; or
(h) sub-contractor providing services by way of works contract to another contractor providing works contract
services which are exempt;
30. Carrying out an intermediate production process as job work in relation to -
(a) agriculture, printing or textile processing;

INDIRECT TAXES
(b) cut and polished diamonds and gemstones; or plain and studded jewellery of gold and other precious metals,
falling under Chapter 71 of the Central Excise Tariff Act, 1985 (5 of 1986);
(c) any goods on which appropriate duty is payable by the principal manufacturer; or
(d) processes of electroplating, zinc plating, anodizing, heat treatment, powder coating, painting including spray
painting or auto black, during the course of manufacture of parts of cycles or sewing machines upto an
aggregate value of taxable service of the specified processes of one hundred and fifty lakh rupees in a financial
year subject to the condition that such aggregate value had not exceeded one hundred and fifty lakh rupees
during the preceding financial year;
31. Services by an organiser to any person in respect of a business exhibition held outside India;
32. Services by way of making telephone calls from -
(a) departmentally run public telephone;
(b) guaranteed public telephone operating only for local calls; or
(c) free telephone at airport and hospital where no bills are being issued;
33. Services by way of slaughtering of animals;
34. Services received from a provider of service located in a non- taxable territory by -
(a) Government, a local authority, a governmental authority or an individual in relation to any purpose other than
commerce, industry or any other business or profession;
(b) an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961) for the purposes of providing
charitable activities; or
(c) a person located in a non-taxable territory;
35. Services of public libraries by way of lending of books, publications or any other knowledge - enhancing content or
material;
36. Services by Employees’ State Insurance Corporation to persons governed under the Employees’ Insurance Act, 1948
(34 of 1948);
37. Services by way of transfer of a going concern, as a whole or an independent part thereof;
38. Services by way of public conveniences such as provision of facilities of bathroom, washrooms, lavatories, urinal or
toilets;
39. Services by a governmental authority by way of any activity in relation to any function entrusted to a municipality
under article 243 W of the Constitution.
40. Services by way of loading, unloading, packing, storage or warehousing of rice
2. Definitions
For the purpose of this notification, unless the context otherwise requires, –
(a) “Advocate” has the meaning assigned to it in clause (a) of sub-section (1) of section 2 of the Advocates Act, 1961
(25 of 1961);
(b) “appropriate duty” means duty payable on manufacture or production under a Central Act or a State Act, but shall
not include ‘Nil’ rate of duty or duty wholly exempt;
(c) “arbitral tribunal” has the meaning assigned to it in clause (d) of section 2 of the Arbitration and Conciliation Act,
1996 (26 of 1996);
(d) “authorised medical practitioner” means a medical practitioner registered with any of the councils of the recognised
system of medicines established or recognized by law in India and includes a medical professional having the
requisite qualification to practice in any recognised system of medicines in India as per any law for the time being
in force;

(e) “authorised person” means any person who is appointed as such either by a stock broker (including trading member)
or by a member of a commodity exchange and who provides access to trading platform of a stock exchange or a
commodity exchange as an agent of such stock broker or member of a commodity exchange;
(f) “auxiliary educational services” means any services relating to imparting any skill, knowledge, education or
development of course content or any other knowledge – enhancement activity, whether for the students or the
faculty, or any other services which educational institutions ordinarily carry out themselves but may obtain as
outsourced services from any other person, including services relating to admission to such institution, conduct of
examination, catering for the students under any mid-day meals scheme sponsored by Government, or transportation
of students, faculty or staff of such institution;
(g) “banking company” has the meaning assigned to it in clause (a) of section 45A of the Reserve Bank of India Act,
1934(2 of 1934);
(h) “brand ambassador” means a person engaged for promotion or marketing of a brand of goods, service, property
or actionable claim, event or endorsement of name, including a trade name, logo or house mark of any person;
(i) “business facilitator or business correspondent” means an intermediary appointed under the business facilitator
model or the business correspondent model by a banking company or an insurance company under the guidelines
issued by Reserve Bank of India;
(j) “clinical establishment” means a hospital, nursing home, clinic, sanatorium or any other institution by, whatever
name called, that offers services or facilities requiring diagnosis or treatment or care for illness, injury, deformity,
abnormality or pregnancy in any recognised system of medicines in India, or a place established as an independent
entity or a part of an establishment to carry out diagnostic or investigative services of diseases;
(k) “charitable activities” means activities relating to -
(i) public health by way of -
(a) care or counseling of (i) terminally ill persons or persons with severe physical or mental disability, (ii)
persons afflicted with HIV or AIDS, or (iii) persons addicted to a dependence-forming substance such as
narcotics drugs or alcohol; or
(b) public awareness of preventive health, family planning or prevention of HIV infection;
(ii) advancement of religion or spirituality;
(iii) advancement of educational programmes or skill development relating to,-
(a) abandoned, orphaned or homeless children;
(b) physically or mentally abused and traumatized persons;
(c) prisoners; or
(d) persons over the age of 65 years residing in a rural area;
(iv) preservation of environment including watershed, forests and wildlife;
(v)
(l) “commodity exchange” means an association as defined in section 2(j) and recognized under section 6 of the
Forward Contracts (Regulation) Act, 1952 (74 of 1952);
(m) “contract carriage” has the meaning assigned to it in clause (7) of section 2 of the Motor Vehicles Act, 1988 (59 of
1988);
(n) “declared tariff” includes charges for all amenities provided in the unit of accommodation (given on rent for stay)
like furniture, air-conditioner, refrigerators or any other amenities, but without excluding any discount offered on
the published charges for such unit;
(o) “distributor or selling agent” has the meaning assigned to them in clause (c) of the rule 2 of the Lottery (Regulation)
Rules, 2010 notified by the Government of India in the Ministry of Home Affairs, published in the Gazette of India,
Extraordinary, Part-II, Section 3, Sub-section (i), vide number G.S.R. 278(E), dated the 1st April, 2010 and shall
include distributor or selling agent authorised by the lottery-organising State;

INDIRECT TAXES
(p) “general insurance business” has the meaning assigned to it in clause (g) of section 3 of General Insurance Business
(Nationalisation) Act, 1972 (57 of 1972);
(q) “general public” means the body of people at large sufficiently defined by some common quality of public or
impersonal nature;
(r) “goods carriage” has the meaning assigned to it in clause (14) of section 2 of the Motor Vehicles Act, 1988 (59 of
1988);
(s) “governmental authority” means an authority or a board or any other body;
(i) set up by an Act of Parliament or a State Legislature; or
(ii) established by Government, with 90% or more participation by way of equity or control, to carry out any
function entrusted to a municipality under article 243W of the Constitution;
(t) “health care services” means any service by way of diagnosis or treatment or care for illness, injury, deformity,
abnormality or pregnancy in any recognised system of medicines in India and includes services by way of
transportation of the patient to and from a clinical establishment, but does not include hair transplant or cosmetic
or plastic surgery, except when undertaken to restore or to reconstruct anatomy or functions of body affected due
to congenital defects, developmental abnormalities, injury or trauma;
(u) “incubatee” means an entrepreneur located within the premises of a Technology Business Incubator (TBI) or Science
and Technology Entrepreneurship Park (STEP) recognised by the National Science and Technology Entrepreneurship
Development Board (NSTEDB) of the Department of Science and Technology, Government of India and who has
entered into an agreement with the TBI or the STEP to enable himself to develop and produce hi-tech and innovative
products;
(v) “insurance company” means a company carrying on life insurance business or general insurance business;
(w) “legal service” means any service provided in relation to advice, consultancy or assistance in any branch of law, in
any manner and includes representational services before any court, tribunal or authority;
(x) “life insurance business” has the meaning assigned to it in clause (11) of section 2 of the Insurance Act, 1938 (4 of
1938);
(y) “original works” means has the meaning assigned to it in Rule 2A of the Service Tax (Determination of Value) Rules,
2006;
(z) “principal manufacturer” means any person who gets goods manufactured or processed on his account from
another person;
(za) “recognized sports body” means - (i) the Indian Olympic Association, (ii) Sports Authority of India, (iii) a national
sports federation recognised by the Ministry of Sports and Youth Affairs of the Central Government, and its affiliate
federations, (iv) national sports promotion organisations recognised by the Ministry of Sports and Youth Affairs of
the Central Government, (v) the International Olympic Association or a federation recognised by the International
Olympic Association or (vi) a federation or a body which regulates a sport at international level and its affiliated
federations or bodies regulating a sport in India;
(zb) “religious place” means a place which is primarily meant for conduct of prayers or worship pertaining to a religion,
meditation, or spirituality;
(zc) “residential complex” means any complex comprising of a building or buildings, having more than one single
residential unit;
(zd) “rural area” means the area comprised in a village as defined in land revenue records, excluding-the area under any
municipal committee, municipal corporation, town area committee, cantonment board or notified area committee;
or any area that may be notified as an urban area by the Central Government or a State Government;
(ze) “single residential unit” means a self-contained residential unit which is designed for use, wholly or principally, for
residential purposes for one family;
(zf) “specified international organization” means an international organization declared by the Central Government
in pursuance of section 3 of the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947), to which the

provisions of the Schedule to the said Act apply;
(zg) “state transport undertaking” has the meaning assigned to it in clause (42) of section 2 of the Motor Vehicles Act,
1988 (59 of 1988);
(zh) “sub-broker” has the meaning assigned to it in sub-clause (gc) of clause 2 of the Securities and Exchange Board of
India (Stock Brokers and Sub-brokers) Regulations, 1992;
(zi) “trade union” has the meaning assigned to it in clause (h) of section 2 of the Trade Unions Act, 1926 (16 of 1926).
3. This notification shall come into force on the 1st day of July, 2012.

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Notes...

Notes...

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Notes...

2nd
Technical Session:
Topic
Jurisprudence and how to represent before
authorities.
Speaker
CA. D N Panda
Member, CESTAT

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Notes...

CA. D N Panda
1. Born on: 15.12.1955.
2. Educational Qualifications and awards
(A). First Rank holder in B.Com (Hons) from Brahmapur University
(B). Law Graduate
(C). Enrolled as Associate Member of Institute of Chartered Accountants of India (ICAI) in the year 1984 and
became Fellow Member in 1989.
3. Awardee of S. Vaidyanath Aiyar Memorial Fund Scholarship for securing highest marks in Advanced Accountancy
& Auditing in B. Com (Hons) in Eastern Region of Institute of Chartered Accountants of India (ICAI) for pursuing
Chartered Accountancy course.
4. Professional Experience
(A). Practised as a Chartered Accountant till early1991.
(B). Enrolled as an Advocate in Orissa Bar Council in May 1991.
• Commenced Advocacy under guidance of Senior Advocate Sri Bijoy Pal on various branches of law, both in
original side (Writs and suits) and Appellate side as well as Review and Revisionay jurisdictions.
• Dealt various litigations under law of Contracts, Sale of Goods, Labour Laws, Mining, Service matters,
Essential Commodities, Land Revenue, Royalty, Railway Claims, Arbitration, Motor Accident Claims,
Election, Co-operative, Education, Corporate Law matters, Taxation and Environment.
• Conducted Company prosecutions and Economic Offences trials.
• Appeared and argued before various Courts and Tribunals throughout country.
• Acted as legal Advisor to various entities in various sector of the economy as well as World Bank Assisted
Infrastructure Projects in Odisha.
• Specialised in direct and indirect taxes as well as corporate law.
5. Present and past Position and Responsibilities handled:
(1) Posted as Judicial Member of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) in Eastern Zonal Bench,
Kolkatta w.e.f. 22.11.2006 till 31.10.2008.
(2) Joined in Principal Bench of CESTAT, New Delhi w. e. f 10.11.2008 and continuing at the same place.
(3) Length of service as Judicial Member of CESTAT is 7 years.
(4) Disposed nearly 3,000 appeals and short matters during incumbency in Eastern Zonal Bench, Kolkatta during
22.11.2006 to 30.10.2008.
(5) Nearly 7,6800 appeals and 4800 short matters were disposed in Principal Bench, New Delhi and other Benches
from 10.11.2008.

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(6) Disposed 20 Anti Dumping matters as member of Anti Dumping Bench.
(7) Disposed 15 important contentious issues in Larger Benches.
(8) 13,896 decisions have been reported in Excise Law Times (ELT) and Service Tax Review (STR), Revenue Law
Times (RLT), Service Tax Today (STT) and Excise & Customs Reports (ECR) and 16 orders have been affirmed by
Supreme Court and High Courts.
(9) As member of Tribunal Administration (CESTAT) conducted Domestic and Vigilance enquiries, Disciplinary
proceedings, Reviewed A C R (staff).
(10) Served as Deputy Secretary (Law) of the Institute of Chartered Accountants of India (ICAI), at New Delhi for a
short span.
6. Professional Contributions:
• Contributed several articles on Taxation – Direct Taxes and Indirect Taxes, Company law, Corporate Management
and Economics Studies in various Journals like Taxman, Current Tax Reporter, Company Law Journals, Company
Law Digest, Sales Tax Literature, “Chartered Secretary” and other legal literatures and professional magazines.
• Delivered guest lectures on different topics of law in Universities and in Programmes conducted by Govt.
• Presented papers in All India Conferences and seminars and training programme for Officers of Govt. Department
on different topics of law.
• One Term member of Regional Direct Taxes Advisory Committee in Odisha under Central Board of Direct Taxes.
7. Authorship:
(A). “Chartered Accountants Practice Manual”.
(B). “Practical Handbook on Information Technology Act, 2000”.
8. Address:
Office: Customs, Excise and Service Tax Appellate Tribunal, West Block -2, R. K. Puram New Delhi 110 066
Residence Tower No. 6, House No. B/2, New Moti Bagh, New Delhi 110 023, Tel: 011 2410 0568
(Present):
Residence 505, Divya Prabha Apartment, Nageswar Tangi, Bhubaneswar -751 002, Odisha.
(Permanent):
9. E-mail address: pdnath1955@gmail.com
10. Hobby: Social service.

JURISPRUDENCE
1 Jurisprudence: An Overview
The word jurisprudence derives from the Latin term juris prudentia, which means “the study, knowledge, or science
of law.”
In the United States jurisprudence commonly means the philosophy of law. Legal philosophy has many branches,
with four types being the most common. The most prevalent form of jurisprudence seeks to analyze, explain,
classify, and criticize entire bodies of law, ranging from contract to tort to Constitutional Law. Legal encyclopedias,
law reviews, and law school textbooks frequently contain this type of jurisprudential scholarship. The second type
of jurisprudence compares and contrasts law with other fields of knowledge such as literature, economics, religion,
and the social sciences. The purpose of this type of study is to enlighten each field of knowledge by sharing insights
that have proven to be important in advancing essential features of the compared discipline.
The third type of jurisprudence raises fundamental questions about the law itself. These questions seek to reveal
the historical, moral, and cultural underpinnings of a particular legal concept. The Common Law (1881), written
by Oliver Wendell Holmes Jr., is a well-known example of this type of jurisprudence. It traces the evolution of civil
and criminal responsibility from undeveloped societies where liability for injuries was based on subjective notions of
revenge, to modern societies where liability is based on objective notions of reasonableness.
The fourth and fastest-growing body of jurisprudence focuses on even more abstract questions, including, What
is law? How does a trial or appellate court judge decide a case? Is a judge similar to a mathematician or a scientist
applying autonomous and determinate rules and principles? Or is a judge more like a legislator who simply decides a
case in favor of the most politically preferable outcome? Must a judge base a decision only on the written rules and
regulations that have been enacted by the government? Or may a judge also be influenced by unwritten principles
derived from theology, moral philosophy, and historical practice?
2 Schools of jurisprudence
Apart from different types of jurisprudence, different schools of jurisprudence exist. Formalism, or conceptualism,
treats law like math or science. Formalists believe that a judge identifies the relevant legal principles, applies them to
the facts of a case, and logically deduces a rule that will govern the outcome of the dispute. In contrast, proponents
of legal realism believe that most cases before courts present hard questions that judges must resolve by balancing
the interests of the parties and ultimately drawing an arbitrary line on one side of the dispute. This line, realists
maintain, is drawn according to the political, economic, and psychological inclinations of the judge. Some legal
realists even believe that a judge is able to shape the outcome of the case based on personal biases.
Apart from the realist-formalist dichotomy, there is the classic debate over the appropriate sources of law between
positivist and natural law schools of thought. Positivists argue that there is no connection between law and morality
and the only sources of law are rules that have been expressly enacted by a governmental entity or court of law.
Naturalists, or proponents of natural law, insist that the rules enacted by government are not the only sources of
law. They argue that moral philosophy, religion, human reason and individual conscience are also integrate parts of
the law.
Four schools of jurisprudence have attempted to answer these questions: formalism proposes that law is a science;
realism holds that law is just another name for politics; Positivism suggests that law must be confined to the written
rules and regulations enacted or recognized by the government; and naturalism maintains that the law must reflect
eternal principles of justice and morality that exist independent of governmental recognition.
Modern U.S. legal thought began in 1870. In that year, Holmes, the father of the U.S. legal realist movement, wrote
his first major essay for the American Law Review, and Christopher Columbus Langdell, the father of U.S. legal
formalism, joined the faculty at Harvard Law School.
2.1 Formalism
Legal formalism, also known as conceptualism, treats law like a math or science. Formalists believe that in the same
way a mathematician or scientist identifies the relevant axioms, applies them to given data, and systematically
reaches a demonstrable theorem, a judge identifies the relevant legal principles, applies them to the facts of a case,
and logically deduces a rule that will govern the outcome of a dispute. Judges derive relevant legal principles from

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various sources of legal authority, including state and federal constitutions, statutes, regulations, and case law.
For example, most states have enacted legislation that prohibits courts from probating a will that was not signed
by two witnesses. If a court is presented with a number of wills to probate for the same estate, and only one of
those wills has been witnessed by at least two persons, the court can quickly deduce the correct legal conclusion in
a formalistic fashion: each will that has been signed by fewer than two witnesses will have no legal effect, and only
the will executed in compliance with the statutory requirements may be probated.
Formalists also rely on inductive reasoning to settle legal disputes. Whereas deductive reasoning involves the
application of general principles that will yield a specific rule when applied to the facts of a case, inductive
reasoning starts with a number of specific rules and infers from them a broader legal principle that may be applied
to comparable legal disputes in the future. griswold v. connecticut, 381 U.S. 479, 85 S. Ct. 1678, 14 L. Ed. 2d 510
(1965), provides an example. In Griswold, the Supreme Court ruled that although no express provision of the federal
Constitution guarantees the right to privacy, and although no precedent had established such a right, an individual’s
right to privacy can be inferred from the First, Third, Fourth, Fifth, Ninth, and Fourteenth Amendments and the cases
interpreting them.
English jurist Sir Edward Coke was among the first to popularize the formalistic approach to law in Anglo-American
history. Coke believed that the Common Law was “the peculiar science of judges.” The common law, Coke said,
represented the “artificial perfection of reason” obtained through “long study, observation, and experience.” Coke
also believed that only lawyers, judges, and others trained in the law could fully comprehend and apply this highest
method of reasoning. The rest of society, including the king or queen of England, was not sufficiently learned to
do so. Langdell invigorated Coke’s jurisprudence of artificial reason in the United States during the second half of
the nineteenth century. Langdell compared the study of law to the study of science, and suggested that law school
classrooms were the laboratories of jurisprudence. Judicial reasoning, Langdell believed, parallels the reasoning
used in geometric proofs. He urged professors of law to classify and arrange legal principles much as a taxonomist
organizes plant and animal life. Langdell articulated what has remained the orthodox school of thought in U.S.
jurisprudence throughout the twentieth century.
Since the early 1970s, Professor Ronald M. Dworkin has been the foremost advocate of the formalist approach with
some subtle variations. Although Dworkin stops short of explicitly comparing law to science and math, he maintains
that law is best explained as a rational and cohesive system of principles that judges must apply with integrity. The
principle of integrity requires that judges provide equal treatment to all litigants presenting legal claims that cannot
honestly be distinguished. Application of this principle, Dworkin contends, will produce a “right answer” in all cases,
even cases presenting knotty and polemical political questions.
2.2 Realism
The realist movement, which began in the late eighteenth century and gained force during the administration of
President Franklin D. Roosevelt, was the first to attack formalism. Realists held a skeptical attitude toward Langdellian
legal science. “The life of the law has not been logic, it has been experience,” Holmes wrote in 1881.
Realists held two things to be true. First, they believed that law is not a scientific enterprise in which deductive
reasoning can be applied to reach a determinate outcome in every case. Instead, most litigation presents hard
questions that judges must resolve by balancing the interests of the parties and ultimately drawing an Arbitrary line
on one side of the dispute. This line is typically drawn in accordance with the political, economic, and psychological
proclivities of the judge.
For example, when a court is asked to decide whether a harmful business activity is a common-law Nuisance, the
judge must ascertain whether the particular activity is reasonable. The judge does not base this determination on a
precise algebraic equation. Instead, the judge balances the competing economic and social interests of the parties,
and rules in favor of the litigant with the most persuasive case. Realists would thus contend that judges who are
ideologically inclined to foster business growth will authorize the continuation of a harmful activity, whereas judges
who are ideologically inclined to protect the environment will not.
Second, realists believed that because judges decide cases based on their political affiliation, the law tends always to
lag behind social change. For example, the realists of the late nineteenth century saw a dramatic rise in the disparity
between the wealth and working conditions of rich and poor U.S. citizens following the industrial revolution. To
protect society’s poorest and weakest members, many states began drafting legislation that established a Minimum

Wage and maximum working hours for various classes of exploited workers. This legislation was part of the U.S.
Progressive movement, which reflected many of the realists’ concerns.
The Supreme Court began striking down such laws as an unconstitutional interference with the freedom of contract
guaranteed by the Fourteenth Amendment of the U.S. Constitution. U.S. realists claimed that the Supreme Court
justices were simply using the freedom-of-contract doctrine to hide the real basis of their decision, which was
their personal adherence to free-market principles and laissez-faire economics. The realists argued that the free-
market system was not really free at all. They believed that the economic structure of the United States was based
on coercive laws such as the employment-at-will doctrine, which permits an employer to discharge an employee
for almost any reason. These laws, the realists asserted, promote the interests of the most powerful U.S. citizens,
leaving the rest of society to fend for itself.
Some realists only sought to demonstrate that law is neither autonomous, apolitical, nor determinate. For example,
Jerome Frank, who coined the term legal realism and later became a judge on the U.S. Court of Appeals for the
Second Circuit, emphasized the psychological foundation of judicial decision making, arguing that a judge’s decision
may be influenced by mundane things like what he or she ate for breakfast. Frank believed that it is deceptive for
the legal profession to perpetuate the myth that the law is clearly knowable or precisely predictable, when it is so
plastic and mutable. Karl Llewellyn, another founder of the U.S. Legal Realism movement, similarly believed that the
law is little more than putty in the hands of a judge who is able to shape the outcome of a case based on personal
biases.
Since the mid-1960s, this theme has been echoed by the Critical Legal Studies movement, which has applied the
skeptical insights of the realists to attack courts for rendering decisions based on racial, sexist, and homophobic
prejudices. For example, feminist legal scholars have pilloried the Supreme Court’s decision in Craig v. Boren,
429 U.S. 190, 97 S. Ct. 451, 50 L. Ed. 2d 397 (1976), for offering women less protection against governmental
discrimination than is afforded members of other minority groups. Gay legal scholars similarly assailed the Supreme
Court’s decision in Bowers v. Hardwick, 478 U.S. 186, 106 S. Ct. 2841, 92 L. Ed. 2d 140 (1986), for failing to
recognize a fundamental constitutional right to engage in homosexual Sodomy. The Supreme Court’s 2003 decision
in Lawrence v. Texas 539 U.S., 123 S. Ct. 2472, 156 L. Ed. 2d 508, that overturned the Bowers holding was a
vindication for gay rights jurisprudence.
Other realists, such as Roscoe Pound, were more interested in using the insights of their movement to reform the
law. Pound was one of the original advocates of sociological jurisprudence in the United States. According to Pound,
the aim of every law—whether constitutional, statutory, or case—should be to enhance the welfare of society.
Jeremy Bentham, a legal philosopher in England, planted the seeds of sociological jurisprudence in the eighteenth
century when he argued that the law must seek to achieve the greatest good for the greatest number of people in
society. Bentham’s theory, known as Utilitarianism, continues to influence legal thinkers in the United States.
Law and economics is one school of thought that traces its lineage to Benthamite jurisprudence. This school, also
known as economic analysis of the law, argues that judges must decide cases in order to maximize the wealth of
society. According to law and economics exponents, such as Richard Posner, each person in society is a rational
maximizer of his or her own self-interest. Persons who rationally maximize their self-interest are willing to exchange
something they value less for something they value more. For example, every day in the United States, people
voluntarily give up their time, money, and liberty to acquire food, property, or peace of mind. This school of thought
contends that the law must facilitate these voluntary exchanges to maximize the aggregate wealth of society.
Another school of thought Bentham influenced is known as legal pragmatism. Unlike law and economics exponents,
legal pragmatists provide no formula for determining the best means to improve the welfare of society. Instead,
pragmatists contend that judges must merely set a goal that they hope to achieve in resolving a particular legal
dispute, such as the preservation of societal stability, the protection of individual rights, or the delineation of
governmental powers and responsibilities. Judges must then draft the best court order to accomplish this goal.
Pragmatists maintain that judges must choose the appropriate societal goal by weighing the value of competing
interests presented by a lawsuit, and then using a “grab bag” of “anecdote, introspection, imagination, common
sense, empathy, metaphor, analogy, precedent, custom, memory, experience, intuition, and induction” to reach the
appropriate balance (Posner 1990, 73).
Pragmatism, sometimes called instrumentalism, is best exemplified by Justice Holmes’s statement that courts
“decide cases first, and determine the principle afterwards.” This school of thought is associated with result-oriented

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jurisprudence, which focuses more on the consequences of a judicial decision than on how the relevant legal
principles should be applied.
2.3 The Realist-Formalist Debate
The realist-formalist dichotomy represents only half of the jurisprudential picture in the United States. The other half
comprises a dialogue between the positivist and natural-law schools of thought. This dialogue revolves around the
classic debate over the appropriate sources of law.
Positivists maintain that the only appropriate sources of law are rules and principles that have been expressly enacted
or recognized by a governmental entity, like a state or federal legislature, administrative body, or court of law. These
rules and principles may be properly considered law, positivists contend, because individuals may be held liable
for disobeying them. Positivists believe that other sources for determining right and wrong, such as religion and
contemporary morality, are only aspirational, and may not be legitimately consulted by judges when rendering a
decision.
Natural-law proponents, or naturalists, agree that governmental rules and regulations are a legitimate source of law,
but assert that they are not the only source. Naturalists believe that the law must be informed by eternal principles
that existed before the formation of government and are independent of governmental recognition. Depending
on the particular strain of Natural Law, these principles may be derived from theology, moral philosophy, human
reason, historical practice, and individual conscience.
The dialogue between positivists and naturalists has a long history. For many centuries, historians, theologians,
and philosophers distinguished positivism from naturalism by separating written law from unwritten law. For
example, the Ten Commandments were inscribed on stone tablets, as were many of the laws of the ancient Greeks.
Roman Emperor Justinian I (a.d. 482–565) reduced most of his country’s laws to a voluminous written code. At
the same time, Christian, Greek, and Roman thinkers all appealed to a higher law that transcended the written law
promulgated by human beings.
Prior to the American Revolution, English philosophers continued this debate along the same lines. English political
thinkers John Austin and Thomas Hobbes were strict positivists who believed that the only authority courts should
recognize are the commands of the sovereign because only the sovereign is entrusted with the power to back up a
command with military and police force. First intimated by Italian philosopher Niccolò Machiavelli, the “sovereign
command” theory of law has been equated in the United States with the idea that might make right.
Contrasted with the writings of Hobbes and Austin were the writings of John Locke in England and Thomas Jefferson
in America. In his Second Treatise on Government (1690), Locke established the idea that all people are born with
the inalienable right to life, liberty, and property. Locke’s ruminations about individual rights that humans possess in
the state of nature prior to the creation of government foreshadowed Jefferson’s Declaration of Independence. In
1776, the Declaration of Independence announced the self-evident truth that “all men are created equal” and are
“endowed by their Creator with certain inalienable Rights,” including the right to “Life, Liberty and the pursuit of
Happiness.”
Both positivism and naturalism have had an enormous influence on how U.S. citizens think about law. The institution
of African–American Slavery, which was recognized by the U.S. Constitution and legalized by legislation passed in
the South prior to the Civil War (1861–65), was attacked by abolitionists who relied on higherlaw principles of
religion and conscience to challenge the moral foundations of human bondage. Following World War II, the Allied
powers successfully prosecuted German government officials, industrialists, and military leaders in Nuremberg for
committing Genocide against European Jewry, even though the Nazi regime had passed laws authorizing such
extermination. The Allies relied in part on the natural-law principle that human dignity is an inviolable right that no
government may vitiate by written law.
2.4 Historical Jurisprudence
Positivists and naturalists tend to converge in the area of historical jurisprudence. Historical jurisprudence is marked
by judges who consider history, tradition, and custom when deciding a legal dispute. Strictly speaking, history does
not completely fall within the definition of either positivism or natural law. Historical events, like the Civil War, are
not legislative enactments, although they may be the product of governmental policy. Nor do historical events

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