Service Tax - Fee Paid for e-tender
MANY companies are conducting the e-tender. While e-tender is conducted by the company some fees is prescribed for participation and the fees so paid would entitle the applicant to participate in the e-tender. Whether such fees paid will form consideration for the purpose of levy of service tax? Whether the answer will be same when the applicant is issued with physical documents to fill up and participate in the tender ?
This was a question raised in the RAC meeting of Hyderabad Central Excise Zone held on 30.06.2016.
A Commissioner observed that service element comes into play as tender floater and tender participant are there and according to Section 65B(44) of the Finance Act 1994, Service means "any activity carried out by a person for another for consideration, and includes a declared service"; accordingly Service Tax is liable to be paid on the fee paid for filing the e-tender.
Another Commissioner stated that it is not the cost of application but the act of allowance for tender Participation has much more intrinsic value and hence service tax is liable to be paid.
The Chief Commissioner held that the matter would be referred to Board for clarification and till such time Service tax may be paid on the fee collected for allowing a participant to file e-tender.