Service Tax clarification from Customs Commissioner - Customs EDI centre liable to Service Tax
When it comes to Service Tax, it appears everybody can issue clarifications and some authorities like Board can give two diametrically opposite clarifications. The latest to join the list of clarificators is The Mumbai Customs Commissioner (Imports). He clarifies that Service Tax is payable on the services rendered by CMC at the Customs EDI centres. The Commissioner has directed CMC to collect 12.24% tax from the users and “affix a stamp on all the existing coupons indicating, “12.24% Service Tax Extra”, & “Service Tax Registration No. _________”.
The Commissioner’s provocation to issue such instructions is apparently the Finance Act 2006. His circular says,
Service Tax @12% and Education Cess @ 2% of the Service Tax (12.24% aggregate) is leviable w.e.f. 01.05.2006 on any service in relation to computerized data processing and maintaining of Computer Software as per Section 65(19) of Finance Act 1994 as amended by Finance Act 2006 read with Notification No. 15/2006 ST dt. 25.04.2006.
The Finance Act has amended clause 19 of Section 65 as follows, “"developing or maintaining of computer software, or computerised data processing", the words "or developing of computer software" shall be substituted;
So maintaining of computer software was deleted from the excluded category. How will this bring CMC into the Service Tax net for the EDI work? And how was it not covered earlier? Is CMC marinating computer software? Id so who is the client? It should be the Customs and they should pay Service Tax. And in what way is the Customs Commissioner concerned with Service Tax? If CMC is to be registered with Service Tax, he should go to the Service Tax Commissionerate and not to the Customs Commissioner.
PUBLIC NOTICE NO. dated 10th May 2006 of the COMMISSIONER OF CUSTOMS (IMPORTS), Mumbai