Municipalities vis a vis service tax

This query is : Resolved

SUDHIR A KHANOLKAR (Querist)
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26 August 2012 Respected Sir

Are following activities of a municipality liable for Service Tax?
Pl. clarify the position prior to 1-7-2012

1. The municipality charges nominal fee of Rs. 5/- on first come first serve basis for occupying its fish and vegetable market place on a day to basis.

2. It charges Rs. 10/- per hour for usage of its swimming pool and badminton Hall.

3. It rents chairs to any member of the public on rent.

CA Suresh Jain

CA Suresh Jain (Expert)
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27 August 2012 Services provided by a municipality are not taxable 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; Services provided at Sr. Number 2 and 3 are in no way provided to business entity and therefore not taxable. For Sr. 1 a further study is required., apparently it looks to be a support service provided to business entities and therefore taxable
sureshjain@gmail.com

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