Dear G.K, I don't know what Devil's Advocate. With due regards, what is commission??

Eg:-

1. Instead of you, I do a job you pay me commission or brokerage
2. I get you an apartment for Rent - You will pay me commission or brokerage.

Now in the second case where is the question of acting on behalf of another person??. The way you read the provisions were not appropriate. What you did was, you kept on behalf of person as a common factor and listed out other points under it and you seem to suggest that in all activity there should be "on behalf of other". This is not correct.

Read the section as such,

"commission or brokerage" includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered (not being professional services) or for any services in the course of buying or selling of goods or in relation to any transaction relating to any asset, valuable article or thing, not being securities;

This is pure English:

If i say when

"India is batting that too when sachin bats or when ponting bats"

or

"India is batting that too when sachin bats or ponting bats"

Observe the difference. In the first case there are two different scenarios, i.e.,

1. When India or sachin bats

2. When ponting bats

but in second case, as the word "when" is missing it means that Sachin and Ponting are both in Indian team.

Now coming back to the Commission definition, please observe it falls under Catogory one, i.e., it agains begins with "for any service". So it should be read as

Commission or brokerage:-

Includes any payment received or receivable, directly or indirectly,

1. by a person acting on behalf of another person for services rendered (Not professional service)
2. or for any services in the course of buying or selling of goods
3. in relation to any transaction relating to any asset, valuable article or thing, not being securities;

So, for the 2 and 3 part there is no need for acting "on behalf of other" and moreover Commission is an "INCLUSIVE " definition.

Hope i have made myself clear Mr.G.K. Amir, i am replying to you about 194C in the next post

Shiva

Dear Amir,

I want ask you a question?. If two persons enter into a CONTRACT to supply 500 kgs of Sugar on or before 17/01/2010 so that we all can celebrate the CA Final students success.

Can you say whether 194C is attracted here.

Humour me, i will try to give you a clarity on these sections.

Shiva

Dear Mr.Manish,

CCE v.Chandan Metal Products

At the outset, i say that this case law is a superb one, but we need to read the entire case law. See, in that case, the issue related to "Interior decorator definition".

"interior decorator" means any person engaged, whether directly or indirectly, in the business of providing by way of advice, consultancy, technical assistance or in any other manner, services related to planning, design or beautification of spaces, whether man-made or otherwise and includes a landscape designer;

Note the word "BUSINESS" in the definition. The CESTAT held that a stray incident will not mean that the person is engaged in that business. For attracting this definition the person should be involved in that field.

However, NOT ALL Definitions under the Service Tax uses the word "business".

Meaning: - Only if the definition contains the word business - This case law is applicable. Other wise - even if it a stray incident - IT IS CHARGEABLE TO SERVICE TAX.

shakumbari sugar v.cce(2006) 5 STT 247(cestat

In this case, the issue was relating to Consulting Engineer.

The Honb'le CESTAT held that Consulting Engineer is a "Professional" who gets a degree on that and is doing that business and hence, a stray service will not make a person "Professional".

So we can classify service into two broad catagories:

1. Where Stray service case law is applicable

• where the word "business" is there in the definition
• where the service inherently has a "Profession attached to it". - Like CA, CS, Engineer etc.

       2. Where Stray service case law is not applicable

Business Auxillary Service falls under Catagory 2: How it falls under BAS has already been detailed above in my previous posts.

Conclusion:

1. This service is covered under BAS

2. BAS is not covered by these "Stray Case Laws"

3. Hence, Service Tax is APPLICABLE.

Shiva

Dear Shiva Kumar

Thanks for detailed analysis of case.Although i donot have the full judgement but i would like to mention that there were two parts one related to Interior Decorator and other related with Management Consultant.Here the assesse provided investment advice on shares and charged for it .The Tribunal dismissed the demand and held that giving advice in stray cases will not bring the assesse in that particular category unless it is known as such.Also kindly refer Taxmann Service Tax ready reckoner page 11 & para 2.1-5 it has mentioned Stray Service is not taxable.If it has such restrictive use as mentioned by you i donot think that they would have mentioned this case in general sense.

J.K.Shahi