18 August 2012
From the definition of service it looks primafacie that transaction in money or actionable claims are excluded from the definition u/s 65B (44).
Hence can we conclude that all transaction in money like money lending pawn brokerage, chits kuris etc,.. does not fall under the ambit of service .
19 August 2012
In business chit fund certain commission received from members is retained by the promoters as consideration for providing services in relation to the chit fund it is not a transaction only in money. The consideration received for such service is therefore chargeable to service tax.
19 August 2012
So, by that analogy, & after the arrival of "negative list", is it OK to presume that all commissions recd in any form of business are subject to service tax b'coz in chit business basically what the promoter gets is a commission for pooling the members & their resources...
Secondly, when the definition says that any activity involving "transaction in money or actionable claim" is not service, isn't it right to conclude that the chit business, at core, involves money transaction only & commisison earned is part & parcel of it, hence not subject to S.T.
19 August 2012
It is the participants of the chit fund who pool the funds and are awarded prize money are involved in the activity of transaction in money. The promoters who earn commission for arranging such chit fund activities cannot be said to be involved in transaction of money and thus the commission that represent consideration for conducting such chit fund activity should be liable to service tax.
CAclubindia
