18 October 2007
My Client is an authorised dealer for a renowned brand of two wheelers.Recently a survey was conducted at his premises and he was queried as to why has he not got himself registered with the service tax authorities. The reply was that we were still under the basic exemption limit.The department took the view that since the services being provided are under a brand name the services should be taxable from the very first receipt.
My view from the study i have done on this subject so far is that, services provided under brand name are those where the service provider is directly the company whose dealer is managing it. However in this case my client is providing service on his own behalf, i.e. under his name and not in the name of the company.Please Advice.
19 October 2007
Your client, an authorised service agent is laible to service tax for the services provided by him for two wheelers of a company. Presumably,he is providing the services in his own right only using the brand name of the company for which he is authorised. Therfore if service receipts exceed the exemption limit of Rs.8 lacs p.a. then only service tax is payable.
19 October 2007
AS PER SEC 65(9) OF SERVICE TAX ACT ,AUTHORISED SERVICE STATION IS DEFINED TO MEAN ANY SERVICE STATION,AUTHORISED BY ANY MOTOR VEHICLE MANUFACTURER TO CARRY OUT SERVICE, REPAIRS, RESTORATION OR RECONDITIONING OF ANY MOTOR MOTOR CAR OR LIGHT MOT. VEH. OR TWO WHEELED MOTOR VEHICLE MANUFACTURED BY THE SUCH MANUFACTURER. SO NO MENTION OF BRANDED OR UNBRANDED. LET US PL. FORGET BRAND FOR SERVICE TAX PURPOSE. BASIC EXEMP. LIMIT IS RS. EIGHT LAKHS AND THRESHOLD LIMIT FOR REGISTRATION IS RS. SEVEN LAKHS. IF CENTRAL EXCISE DEPT. SURVEY TEAM RAISES THE ISSUE OF BRANDING AND DEMAND REGISTRATION FROM FIRST RECEIPT, THEY HAVE TO NECESSARILY PRODUCE SUCH NOTIFICATION OR DEPT. CIRCULAR TO THAT EFFECT. OTHERWISE ORAL CLAIMS AND ASSUMPTIONS HAVE NO PLACE IN LAW. IF THEY GAVE YOUR CLIENT ANY SUCH DEMAND IN WRITING ,PL. REPLY ASKING THEM TO KINDLY MAKE THE ISSUE CLEAR THROUGH PRODUCTION OF NOTIFIC. /CIRCULAR ON SEEING WHICH YOU MAY OFFER YOUR CLIENT FOR REGITRATION BUT NOT BEFORE SEEING SUCH NOTIFICATION /CIRCULAR. EVEN YOU MAY ASK FOR THE SAID CIRCULAR THROUGH THE below stated OFFICIAL WEBSITES OF GOVT. OF INDIA. www.cbec.gov.in www.exciseand servicetax.nic.in R.V.RAO
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