Please anyone help me by providing a clarification regarding the service tax applicability of Chemical cleaning of industrial equipments.
Whether Chemical cleaning falls under Cleaning Activity Service or maintenance repair service?
Deenaganesh (Manager) (26 Points)
05 April 2011Please anyone help me by providing a clarification regarding the service tax applicability of Chemical cleaning of industrial equipments.
Whether Chemical cleaning falls under Cleaning Activity Service or maintenance repair service?
Pinky Agarwal
(Chartered Accountant)
(426 Points)
Replied 05 April 2011
“management, maintenance or repair” means any service provided by :
(i) any person under a contract or an agreement; or (ii) a manufacturer or any person authorised by him , in relation to,— (a) management of properties, whether immovable or not (b) maintenance or repair of properties whether immoveble or not; or (c) maintenance or repair including reconditioning or restoration, or servicing of any goods or equipment, excluding motor vehicle.
meaning of 'servicing' : service means provision of what is necessary for installation and maintenance of machine etc. or operation or periodic routine maintenence of motor vehicle etc. or assistance or advice given to customer after sale of goods.
Deviprasad G.K.
(Consultant)
(35 Points)
Replied 05 April 2011
Chemical Cleaning Activity fall under “Cleaning Services”
Cleaning Activity
(w.e.f. 16-06-2005)
What is taxable - 65(105)(zzzd)
Any service provided or to be provided to any person, by any other person, in relation to cleaning activity;
Who is the receiver of service
Any person
Who is the provider of service
Any other person
Who is liable to pay service tax
Any other person who is providing services
Meaning of Cleaning Activity - 65(24b)
"cleaning activity" means cleaning, including specialised cleaning services such as disinfecting, exterminating or sterilising of objects or premises, of—
(i) commercial or industrial buildings and premises thereof; or
(ii) factory, plant or machinery, tank or reservoir of such commercial or
industrial buildings and premises thereof, but does not include such services in relation to agriculture, horticulture, animal husbandry or dairying;
Comments:
A. As per Paragraph No 6. of Circular No. 96/7/2007 dated 23/8/2007 states that :-
"6. This circular supersedes all circulars, clarifications and communications, other than Orders issued under section 37B of the Central Excise Act, 1944 (as made applicable to service tax by section 83 of the Finance Act, 1994), issued from time to time by the CBEC, DG (Service Tax) and various field formations on all technical issues including the scope and classification of taxable services, valuation of taxable services, export of services, services received from outside India, scope of exemptions and all other matters on levy of service tax. With the issue of this circular, all earlier clarifications issued on technical issues relating to service tax stand withdrawn."
*************************
1 Primary cleaning service is taxable
2 Specified cleaning such as disinfecting, exterminating and sterilizing services are also taxable
3 Cleaning activity in commercial or industrial building / premises is taxable.
4 Cleaning activity in relation to factory, plant or machinery, tanks or reservoir taxable.
5 Cleaning activity in residential building / premises not covered.
6 Cleaning relating to agriculture, horticulture, animal husbandry and dairying are not taxable
Deenaganesh
(Manager)
(26 Points)
Replied 08 April 2011
Thanks for your replies
We are registered under "Cleaning activity service", ST claims us that we are under MRS.
Since we providing services of Chemical cleaning of plants, eequipments, etc.
Please help me by providing any links or reference as proof to prove Chemical cleaning are under "Cleaning Activity Service" and not under maintenance & repair service
Especially thanks to Prasad G.K.,
we need some more strong references
Awaiting for replies
Thanks
Deenaganesh
(Manager)
(26 Points)
Replied 08 April 2011
| Originally posted by : Deviprasad G.K. | ||
 |
Chemical Cleaning Activity fall under “Cleaning Services” Cleaning Activity (w.e.f. 16-06-2005) What is taxable - 65(105)(zzzd) Any service provided or to be provided to any person, by any other person, in relation to cleaning activity; Who is the receiver of service Any person Who is the provider of service Any other person Who is liable to pay service tax Any other person who is providing services Meaning of Cleaning Activity - 65(24b) "cleaning activity" means cleaning, including specialised cleaning services such as disinfecting, exterminating or sterilising of objects or premises, of— (i) commercial or industrial buildings and premises thereof; or (ii) factory, plant or machinery, tank or reservoir of such commercial or industrial buildings and premises thereof, but does not include such services in relation to agriculture, horticulture, animal husbandry or dairying; Comments: A. As per Paragraph No 6. of Circular No. 96/7/2007 dated 23/8/2007 states that :- "6. This circular supersedes all circulars, clarifications and communications, other than Orders issued under section 37B of the Central Excise Act, 1944 (as made applicable to service tax by section 83 of the Finance Act, 1994), issued from time to time by the CBEC, DG (Service Tax) and various field formations on all technical issues including the scope and classification of taxable services, valuation of taxable services, export of services, services received from outside India, scope of exemptions and all other matters on levy of service tax. With the issue of this circular, all earlier clarifications issued on technical issues relating to service tax stand withdrawn." ************************* 1 Primary cleaning service is taxable 2 Specified cleaning such as disinfecting, exterminating and sterilizing services are also taxable 3 Cleaning activity in commercial or industrial building / premises is taxable. 4 Cleaning activity in relation to factory, plant or machinery, tanks or reservoir taxable. 5 Cleaning activity in residential building / premises not covered. 6 Cleaning relating to agriculture, horticulture, animal husbandry and dairying are not taxable Regards Prasad G.K |
 |
Thanks sir
We need some more strong references, please help
Deviprasad G.K.
(Consultant)
(35 Points)
Replied 09 April 2011
main·te·nance (mānˈtə-nəns)
noun
1. The act of maintaining or the state of being maintained.
2. The work of keeping something in proper condition; upkeep.
Unfortunately, to many in industry, maintenance has become synonymous with "fixing things" when they break rather than preserving them in a functional state. For example, a process operator notes that something is amiss with a particular machine and calls maintenance to fix the problem. Consider a similar scenario in which a predictive technology such as vibration analysis or wear debris analysis identifies a problem, and the operator calls in a maintenance mechanic to further diagnose and resolve the problem.
· The care and servicing by personnel for the purpose of maintaining equipment and facilities in satisfactory operating condition by providing for systematic inspection, detection, and correction of incipient failures either before they occur or before they develop into major defects.
· Maintenance, including tests, measurements, adjustments, and parts replacement, performed specifically to prevent faults from occurring
To make it simple:
The primary goal of maintenance is to avoid or mitigate the consequences of failure of equipment. This may be by preventing the failure before it actually occurs which Planned Maintenance and Condition Based Maintenance help to achieve. It is designed to preserve and restore equipment reliability by replacing worn components before they actually fail. Preventive maintenance activities include partial or complete overhauls at specified periods, oil changes, lubrication and so on. In addition, workers can record equipment deterioration so they know to replace or repair worn parts before they cause system failure. The ideal preventive maintenance program would prevent all equipment failure before it occurs.
Under Service tax
'Maintenance or Repair' Services'
The definition of 'maintenance or repair' has been given under clause (64) of section 65. That is:
“maintenance or repair" means any service provided by
(i) any person under a maintenance contract or agreement, or
(ii) a manufacturer or any person authorised by him,
in relation to maintenance or repair or servicing of any goods or equipment, excluding motor vehicle".
It is quite common to have annual maintenance contract for the repair and maintenance of goods and equipments like annual maintenance contract for computer, water purifier, fax, EPABX, etc. There are many companies, individuals and firms who undertake the contract for the repair and maintenance. A manufacturer or any other person authorised by such manufacturer also provides facilities for annual maintenance or repair of goods or equipments. The service is taxable for maintenance or repair or servicing of any goods or equipment excluding motor vehicle.
The definition of maintenance or repair is wide enough to include within its ambit every person who undertakes maintenance or repair or servicing of any goods or equipment (excluding motor vehicle) under maintenance contract or agreement like AMC. The term ‘maintenance' refers to continuous support to keep something in working order or in existence. Therefore, services in relation to 'maintenance' or 'repair' or ‘servicing' of any 'goods' or 'equipment' provided by any person shall be taxable only if it is provided under maintenance contract/ agreement that signify that service would be taxable if provided only on continuing basis for a certain stipulated period covered under the contract, in other words, one time repair is not covered, but contract to upkeep an equipment is covered under the service tax
Chemical cleaning
Chemical cleaning, by definition, means the use of liquid cleaners mixed in a diluent (water, diesel, methanol, iso-propyl-alcohol and alike) to form a cleaning solution
Using a solvent solution to remove mill scale and corrosion products
Cleaning Activity
(w.e.f. 16-06-2005)
What is taxable - 65(105)(zzzd)
Any service provided or to be provided to any person, by any other person, in relation to cleaning activity;
Who is the receiver of service
Any person
Who is the provider of service
Any other person
Who is liable to pay service tax
Any other person who is providing services
Meaning of Cleaning Activity - 65(24b)
"cleaning activity" means cleaning, including specialised cleaning services such as disinfecting, exterminating or sterilising of objects or premises, of—
(i) commercial or industrial buildings and premises thereof; or
(ii) factory, plant or machinery, tank or reservoir of such commercial or
industrial buildings and premises thereof, but does not include such services in relation to agriculture, horticulture, animal husbandry or dairying;
Comments:
A. As per Paragraph No 6. of Circular No. 96/7/2007 dated 23/8/2007 states that :-
"6. This circular supersedes all circulars, clarifications and communications, other than Orders issued under section 37B of the Central Excise Act, 1944 (as made applicable to service tax by section 83 of the Finance Act, 1994), issued from time to time by the CBEC, DG (Service Tax) and various field formations on all technical issues including the scope and classification of taxable services, valuation of taxable services, export of services, services received from outside India, scope of exemptions and all other matters on levy of service tax. With the issue of this circular, all earlier clarifications issued on technical issues relating to service tax stand withdrawn."
*************************
1 Primary cleaning service is taxable
2 Specified cleaning such as disinfecting, exterminating and sterilizing services are also taxable
3 Cleaning activity in commercial or industrial building / premises is taxable.
4 Cleaning activity in relation to factory, plant or machinery, tanks or reservoir taxable.
5 Cleaning activity in residential building / premises not covered.
6 Cleaning relating to agriculture, horticulture, animal husbandry and dairying are not taxable
Chemical Cleaning Activity fall under “Cleaning Services” not under “management, maintenance or repair” Service
Regards
Prasad G.K
CAclubindia
