|
Translation services do not fall directly under any of the specified 96 taxable services. One needs to interpret the two taxable services categories — business auxiliary services [Section 65(19)] and support services in relation to business or commerce [Section 65(104c)].For business auxiliary services, services may, inter alia, be in relation to procurement of services which are inputs for the client or provision of service on behalf of client. Clause (vii) of the definition covers services which are incidental or auxiliary to activities covered in the definition. Going by the definition, this is a service which is not being rendered for or on behalf of the client and also does not fall within the definition of business auxiliary services.For business or commerce support services, as per Section 65(104c), "support services of business or commerce" means services provided in relation to business or commerce and includes evaluation of prospective customers, telemarketing, processing of purchase orders and fulfilment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, operational assistance for marketing, formulation of customer service and pricing policies, infrastructural support services and other transaction processing.Business entities outsource a number of services for use in business or commerce. These transactions include transaction processing, routine administration or accountancy, customer relationship management and telemarketing. There are also business entities which provide infrastructural support, such as instant offices along with all types of secretarial assistance, known as business centre services.All such outsourced services shall be covered under business or commerce support services. Such services should lend support to business or commerce of service receiver. Services of personal nature shall not be covered. The use of service in commerce or business would provide the essential criteria for coverage in the scope of definition. The indicative limit is given in the definition which can be further expanded to cover all eligible services.Business support services are different from business auxiliary services as the latter are provided on behalf of a person. Support services are provided to the service receiver. While the first limb of this definition is exhaustive, its second limb limits the scope of first limb by restricting it to the inclusive part. Translation of text for communication from one language to another, say, from English to French, is not a business support service provided it is only for written text. If one translates software or patents etc. it may fall under service tax net.Under the principle of ejusdem generis, in a sentence, the succeeding words have to be read ejusdem generis with the preceding words. The Supreme Court and High Courts have followed this in various judicial pronouncements. The CBEC has itself followed this in one of the recent Circulars (No. 83 dated June 4, 2006) clarifying that the postal department is not covered under banking services.Translation also does not result in creation of any intellectual property right. One may, therefore, take a view that none of the present taxable services cover translation of text from one language to other. Once the service is a taxable service, invoicing is irrelevant to create or avoid liability. All taxable services shall be liable to service tax.
|
CAclubindia
