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)
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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)
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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)
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25 August 2020 Thank you sir for your prompt reply.

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