Business Support Service – Clarified
Good things like manna often simply fall from heaven and this is what happened while clarifying on service tax on renting; the Board dropped a bit of manna and clarified that By definition ‘Business Support Service' is a generic service of providing ‘support to the business or commerce of the service receiver'. In other words the principal activity is to be undertaken by the client while assistance or support is provided by the taxable service provider.
A colleague told me, “One positive aspect of the clarification is that it clarified what a business support service constitutes. I think many cases booked under BSS will fail going by this clarification.”
While the ‘renting' clarification is applicable only to theatres, this will have a larger application and may touch many a service.
Let's hope this will not be considered as an obiter dictum by Board.
CBEC Circular No. 109/2009 – ST Dated: February 23 , 2009