ranjitkarmakar (service) (303 Points)
09 August 2014Respected Seniors,
One of my client provide services like civil services, renovation and other fabrication services (only labour portion) to one Private School, what are the implication under service tax, is Education Institute like school are exempted from the ambit of Service Tax, is there any implication Reverse Charge mechanism. Please clear my queries. Thanks
CA Manoj Gautam
(iBanking)
(26 Points)
Replied 09 August 2014
Hi,
As per the amendment, service providers providing education auxiliary services such as "Any services relating to imparting any skill knowledge or education; or Development of course content; or Any other knowledge – enhancement activity, whether for the students or the faculty; or Any other services which education institutions ordinarily carry out themselves but may obtain as outsourced services from any other person, including following services relating to- Admission to such institutions; Conduct of examination; Catering for the students under any mid-day meals scheme sponsored by Government; Transportation of students, faculty or staff of such institution" only will be exempt.
Also, construction services provided to an educational Institute ( unless owned by Govt) will not be exempt. Renting of Immovable property to any educational institute which is providing exempt education will also be exempt.
Reverse charge ( for works contract) will not be applicable as the service recipient is not a business entity. The schools are run under trusts which are not considered as business entity.
ranjitkarmakar
(service)
(303 Points)
Replied 10 August 2014
Thanks Manoj Sir, for your reply and briefing me the details. But till it is not clear whether Repair & Maintenance Service to Private School (only labour portion) is invite service tax when the Service Provider raise bill to School.
ranjitkarmakar
(service)
(303 Points)
Replied 10 August 2014
Thanks Sir for your reply, if material and labour both are provide by the Service Provider and Work Contract is not applicable according to your previous reply. As the school are run by trust. But although we have to charge Service tax on the bill for labour portion. According to Service Tax rule 2A(ii) where exact service portion is not available due to material are involve. How to charge service tax on bill.
CA Manoj Gautam
(iBanking)
(26 Points)
Replied 11 August 2014
Hi Ranjit, I wrote that reverse charge will not be applicable for this. It is a works contract.
balu
(Manager Fin & Adm)
(37 Points)
Replied 19 September 2014
My son who is in CBSE second standard received this circular https://www.standrewsindia.com/noticepdfs/21-SAS-GEN-INFRA%20FEE-SEP14.pdf
To my understanding schools upto 12th standard are exempt if so does the school have any service tax liability on rental and whether they can pass it on to kids.
Please clarify
CAclubindia
