Service Tax applicability

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This discussion clarifies the applicability of Service Tax on services provided to educational institutions and health clinics. While services to hospitals/clinics are generally taxable, exemptions for educational institutions are now limited to specific services like student transport, catering, security, cleaning, housekeeping, and examination-related services. For businesses in their first year, Service Tax is payable on the turnover exceeding Rs. 10 lacs, not the entire amount.

nkpanchal

nkpanchal (Querist)

25 August 2020 1. Whether services provided to education institution and health clinic/hospital was liable to service tax ?
2. If service income exceeds Rs. 10lacs whether, service tax applicable on turnover or excess amount exceeding Rs.10lacs ? e.g - turnover (services) Rs.11lacs, applicability on Rs.11 lacs or 1 lac? this was our first year of services.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

25 August 2020 1 Scope of exemption for services provided to the Educational Institutions was curtailed to some specified services namely;

1. transportation of students, faculty and staff

2. catering, including any mid-day meals scheme sponsored by the Government;

3. security services performed in such educational institution

4. cleaning services performed in such educational institution

5. house-keeping services performed in such educational institution

6. services relating to admission to, or conduct of examination by, such institution.
Service provided to hospital/clinic taxable.
2 service tax payable on 1 lac as this was first year of services.

nkpanchal

nkpanchal (Querist)

25 August 2020 Thank you sir for your prompt reply.

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