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ST on Voluntary Services?

Raj Saxena (1412th Tiger) (Struggling Student) (272 Points)

12 April 2010

Hey can you tell me is the Service Tax is levied on Voluntary Training?

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Raj Saxena (1412th Tiger) (Struggling Student) (272 Points)
Replied 12 April 2010

Please reply

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P.Bashista (Advocate) (367 Points)
Replied 12 April 2010

If the service is voluntary, it means there is no money consideration involved. So on what amount will you charge service tax, even if the that particular trainning service is taxable???

Raj Saxena (1412th Tiger) (Struggling Student) (272 Points)
Replied 13 April 2010

Mr. Bashista u r rit in dis regard.

But, wat if an NGO is providing training to several children and collecting and collecting a nominal fee lets say Rs.100 though their expenditure is Rs.1,000. Primafacie it appears that ST is leviable.

Actually, list of services on which ST is leviable includes COMMERCIAL Training. I want to know wat is the meaning of commercial here.

Please give ur valuable thoughts on this.

P.Bashista (Advocate) (367 Points)
Replied 13 April 2010

Dear Raj

If you see the commercial training and coaching services heading i.e. 49 you will see that the NGO's are clearly exempted under the exempted/non-covered catagories.

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Raj Saxena (1412th Tiger) (Struggling Student) (272 Points)
Replied 13 April 2010

Sir I didn't find ur reference I only find

This is an extract of Section 65 of Service Tax governed by Chapter V of the Finance Act, 1994.

65. Definitions. -

In this Chapter, unless the context otherwise requires, --

(26)

"commercial training or coaching" means any training or coaching provided by a commercial training or coaching centre;

(27)

"commercial training or coaching centre" means any institute or establishment providing commercial training or coaching for imparting skill or knowledge or lessons on any subject or field other than the sports, with or without issuance of a certificate and includes coaching or tutorial classes but does not include preschool coaching and training centre or any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognised by law for the time being in force;

Sir plz clear it.

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P.Bashista (Advocate) (367 Points)
Replied 13 April 2010

Dear Raj,

Please go through the Service tax tariff. This service is under chapter heading 49 and the list of exempted catagories are there.

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 14 April 2010

The understanding of "commercial" as per the Tribunals in the past was that there shouldb e profit motive. Now thta aspect has been sought tobe retrspectively changed.

In your case however since the activity itslef is not commercial ( making a loss in the transaction itslef) the same may not be covered under commercial coaching.