DDT 1871 04.06.2012 - CAG Evades Service Tax? Show Cause Notice to be issued?

By Vijay Kumar

DDT 1878 13.06.2012 - Evasion of Service Tax by CAG No Notice - Yet …

DDT 1883 20.06.2012 - No Service Tax on CAG Clarifies CBEC

If you remember, the Chief Commissioner, Nagpur had written to all Chief Commissioners, to collect Service Tax from the CAG for the paid services offered by him.

In a rather, quick action the Board clarified in Circular No. 159/2012-ST dated 19.06.2012 clarified that the services of CAG are not services as are rendered by a chartered accountant even though both may be engaged in the sphere of the auditing . Board also clarified thatservices of CAG are also not covered by the heading Business Support Services.

Please note, Board did not say that services by CAG are not taxable; it only said that they are not covered under certain specific heads.

Now, with effect from 1st July 2012, there are no such classifications and so perhaps CAG can be brought under the tax net. Though services by Government fall in the negative list, it is doubtful whether CAG is Government and further whether these services will get covered under the exclusion clause (iv) support services, other than services covered under clauses (i) to (iii) above, provided to business entities;

Maybe Nagpur Chief Commissioner can revive her campaign to rope in the CAG!