Service Tax on government departments????????? – Board clarifies?

By Vijay Kumar

Board has examined the question whether services provided by government departments are liable to Service Tax. The postal department is paying Service Tax on Speed Post, but why is the CISF not paying Service Tax? Board clarifies that:-

· In this year's budget, in a number of services, the phrase "commercial concern" has been substituted by the phrase "any person"

· Wherever the service provider is mentioned as "any person", the term "person" ordinarily includes government unless, in the context, government is excluded by applying the rules of statutory interpretation.

So Board advises the field formations to examine individual cases carefully taking into account all the material facts and take a view. In case of any doubt in individual cases having all India implication, and in any case where it is proposed to levy service tax on a service provided by a department of the central government or state government, the same may be referred to the Board.

So it is back to the field and from there back to the Board and from there back to the field and ….

DAVP, customs officers supervising exports, police providing protection etc, may be potential tax evaders.

Board’s letter Dated : November 10, 2006