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Service tax on hair cut

Smruti (CA) (183 Points)

03 September 2012

Hi..

is service tax is applicable on hair cut, hair color provided by SPA.

please reply :)

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6 Replies

Arun Kumar Singh (GST Advocate) (15220 Points)
Replied 03 September 2012

Yes, service tax will be applicable on this services for ssi unit upto rs. 10 lakhs exempt from service tax.

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Smruti (CA) (183 Points)
Replied 03 September 2012

I am confused with the following provisions of service tax (https://www.servicetax.gov.in/orders/inst1_02-annexures.htm) . and i want to know whether this provision is in force after introduction of negative list.

Annexure VII

Beauty parlours 1. The section referred to hereinafter are the sections or clauses of the Finance Act, 1994 as amended by the Finance Act, 2002. Reference to sub-clause or clause means clause or sub-clause of section 65 of the Finance Act, 1994 as amended by the Finance Act, 2002. 2. As per clause (16), “beauty treatment” includes face and beauty treatment, cosmetic treatment, manicure, pedicure or counseling services on beauty, face care or make-up and as per clause (17), “beauty parlour” means any establishment providing beauty treatment services. The taxable service, as per sub-clause (zq) of clause (90) means any service provided, to a customer, by a beauty parlour in relation to beauty treatment. 3. This service covers the beauty treatments such as facial, manicure, pedicure and other make ups provided by beauty parlours. However, it does not include hair cutting and shaving. Further, it does not include plastic surgery/ cosmetics surgery done to improve the appearance, as they are not the kind of service provided by the beauty parlours. These are more appropriately classifiable as medical services. 3.1 The service provided in relation to hair dyeing has been exempted vide notification No. 11/2002-ST dated 1.8.2002. 4. For providing beauty services, parlours use materials such as cosmetics and toilet preparations. A point has been raised as to whether the cost of such materials will be included in the value of taxable service. It is clarified that these materials are essential for providing the service and they are not sold as such but used for treatment such as facials etc. Therefore, they are integral to the service provided. Hence service tax will be charged on the gross amount and no abatement is admissible on account of the value of material consumed in providing the service. 5. Often beauty parlours also sell cosmetics in retail. Quite obviously, no service tax is payable on mere sale of cosmetics or any other material.

Shridhar Shah (Chartered Accountant in Practice) (172 Points)
Replied 03 September 2012

After introduction of negative list, any service - not mentioned in section 66D & mega exemption notification (25/2012) - is taxable service.

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Arun Kumar Singh (GST Advocate) (15220 Points)
Replied 03 September 2012

Dear yagyanseni,

All services will be liable to pay service tax except mega exemption notification no. 25/2012-ST dated 20.06.2012 w.e.f. 01.07.2012. The services of hair cutting & hair color provided by SPA is not covered under mega exemption notification.