Service provided to ministry of power
This query is : Resolved
20 October 2013
Is service provided to Ministry of power- taxable or not taxable
as Ministry of power is a Gov't Authority
Service- Agency service; providing intermediary service
20 October 2013
Please mention the service nature, otherwise check the negative list of service tax
24 July 2025
The taxability of services provided to the Ministry of Power under the Service Tax regime (pre-GST) depends on what kind of service is being provided and who is providing it. Here's a clear explanation:
✅ Basic Rule
Services provided to Government or Government authorities were not automatically exempt from service tax.
The nature of the service and type of provider determined whether service tax was applicable.
⚖️ Analysis of Your Case
🔹 Service Recipient:
Ministry of Power, which is a Central Government department.
🔹 Service Provider:
You/Your Company, providing Agency/Intermediary services.
🔹 Type of Service:
You mentioned "Agency service" / "Intermediary service", which is a taxable service under the Finance Act, 1994.
❌ Not Exempt Merely Because It’s Govt
Service tax was not exempt just because the recipient was a Government authority.
Only certain specific services (like services in relation to water supply, public health, sanitation, etc.) provided by the Government or local authority were exempt under:
Section 66D(a) – Negative List (after 01.07.2012)
Certain exemption notifications (e.g., Notification No. 25/2012-ST)
🧾 Is Agency/Intermediary Service Exempt?
No.
Intermediary services (like those involving procurement, facilitation, coordination) are taxable, even if provided to a Government ministry.
If you are charging a commission or fee, it is taxable.
💡 Exception:
If the service qualifies under a specific exemption in Notification 25/2012-ST (like service to a Government authority for public benefit, under clause 12 or 25), it may be exempt, but strict conditions apply.
Example of exemption under Notification No. 25/2012-ST:
"Services provided to the Government or local authority by way of carrying out any activity in relation to any function entrusted to a municipality under Article 243W of the Constitution."
This is typically not applicable to agency/intermediary services.
✅ Conclusion
✔ Service to Ministry of Power is not automatically exempt from service tax.
❌ Agency or intermediary services are taxable services.
✅ You must charge service tax unless your service specifically falls under an exempted category as per Notification 25/2012-ST or any other relevant circular/notification.
✅ Basic Rule
Services provided to Government or Government authorities were not automatically exempt from service tax.
The nature of the service and type of provider determined whether service tax was applicable.
⚖️ Analysis of Your Case
🔹 Service Recipient:
Ministry of Power, which is a Central Government department.
🔹 Service Provider:
You/Your Company, providing Agency/Intermediary services.
🔹 Type of Service:
You mentioned "Agency service" / "Intermediary service", which is a taxable service under the Finance Act, 1994.
❌ Not Exempt Merely Because It’s Govt
Service tax was not exempt just because the recipient was a Government authority.
Only certain specific services (like services in relation to water supply, public health, sanitation, etc.) provided by the Government or local authority were exempt under:
Section 66D(a) – Negative List (after 01.07.2012)
Certain exemption notifications (e.g., Notification No. 25/2012-ST)
🧾 Is Agency/Intermediary Service Exempt?
No.
Intermediary services (like those involving procurement, facilitation, coordination) are taxable, even if provided to a Government ministry.
If you are charging a commission or fee, it is taxable.
💡 Exception:
If the service qualifies under a specific exemption in Notification 25/2012-ST (like service to a Government authority for public benefit, under clause 12 or 25), it may be exempt, but strict conditions apply.
Example of exemption under Notification No. 25/2012-ST:
"Services provided to the Government or local authority by way of carrying out any activity in relation to any function entrusted to a municipality under Article 243W of the Constitution."
This is typically not applicable to agency/intermediary services.
✅ Conclusion
✔ Service to Ministry of Power is not automatically exempt from service tax.
❌ Agency or intermediary services are taxable services.
✅ You must charge service tax unless your service specifically falls under an exempted category as per Notification 25/2012-ST or any other relevant circular/notification.
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