32 PealLh Servlces

(A) uaLe of lnLroducLlon 01072010 vlde noLlflcaLlon no24/2010S1

dL 2262010
(8) ueflnlLlon and scope of servlce
1axable servlce" means any servlce provlded or Lo be provlded by any hosplLal nurslng home
or mulLlspeclalLy cllnlc
(l) Lo an employee of any buslness enLlLy ln relaLlon Lo healLh checkup or prevenLlve
care where Lhe paymenL for such checkup or prevenLlve care ls made by such
buslness enLlLy dlrecLly Lo such hosplLal nurslng home or mulLlspeclalLy cllnlc or
(ll) Lo a person covered by healLh lnsurance scheme for any healLh checkup or
LreaLmenL where Lhe paymenL for such healLh checkup or LreaLmenL ls made by
Lhe lnsurance company dlrecLly Lo such hosplLals nurslng home or mulLlspeclalLy
cllnlc
SecLlon 63(103)(zzzzo)
(C) 8aLe of 1ax AccounLlng Code
8aLe of 1ax AccounLlng Code
Servlce 1ax 10 of Lhe value of
servlces
00440398 ???
LducaLlon Cess 2 of Lhe servlce Lax
payable
00440298
Secondary and
Plgher LducaLlon
cess
1 of Lhe servlce Lax
payable
00440426
CLher
enalLy/lnLeresL
As levled or appllcable 00440399???
( 8aLe of Lax ls effecLlve from 24022009)
( u ) ClasslflcaLlon of 1axable Servlces
(1) 1he classlflcaLlon of Laxable servlces shall be deLermlned accordlng Lo
Lhe Lerms of Lhe subclauses (103) of secLlon 63
(2) When for any reason a Laxable servlce ls prlma facle classlflable under Lwo
or more subclauses of clause (103) of secLlon 63 classlflcaLlon shall be
effecLed as follows
(a) Lhe subclause whlch provldes Lhe mosL speclflc descrlpLlon shall be preferred
Lo subclauses provldlng a more general descrlpLlon (b) composlLe servlces conslsLlng of a comblnaLlon
of dlfferenL servlces whlch
cannoL be classlfled ln Lhe manner speclfled ln clause (a) shall be classlfled
as lf Lhey conslsLed of a servlce whlch glves Lhem Lhelr essenLlal characLer ln
so far as Lhls crlLerlon ls appllcable
(c) when a servlce cannoL be classlfled ln Lhe manner speclfled ln clause (a) or
clause (b) lL shall be classlfled under Lhe subclause whlch occurs flrsL among
Lhe subclauses whlch equally merlLs conslderaLlon
( Sec63A of llnance AcL1994)
(L) valuaLlon of Laxable servlces for charglng Servlce Lax
(1) Servlce Lax chargeable on any Laxable servlce wlLh reference Lo lLs value shall
(l) ln a case where Lhe provlslon of servlce ls for a conslderaLlon ln money be Lhe gross
amounL charged by Lhe servlce provlder for such servlce provlded or Lo be provlded by
hlm
(ll) ln a case where Lhe provlslon of servlce ls for a conslderaLlon noL wholly or parLly
conslsLlng of money be such amounL ln money wlLh Lhe addlLlon of servlce Lax charged
ls equlvalenL Lo Lhe conslderaLlon
(lll) ln a case where Lhe provlslon of servlce ls for a conslderaLlon whlch ls noL
ascerLalnable be Lhe amounL as may be deLermlned ln Lhe prescrlbed manner
(2) Where Lhe gross amounL charged by a servlce provlder for Lhe servlce provlded or Lo be
provlded ls lncluslve of servlce Lax payable Lhe value of such Laxable servlce shall be
such amounL as wlLh Lhe addlLlon of Lax payable ls equal Lo Lhe gross amounL charged
(3) 1he gross amounL charged for Lhe Laxable servlce shall lnclude any amounL recelved
Lowards Lhe Laxable servlce before durlng or afLer provlslon of such servlce
(4) Sub[ecL Lo Lhe provlslons of subsecLlons (1) (2) and (3) Lhe value shall be deLermlned
ln such manner as may be prescrlbed
LxplanaLlonlor Lhe purposes of Lhls secLlon
(a) conslderaLlon" lncludes any amounL LhaL ls payable for Lhe Laxable servlces
provlded or Lo be provlded
(b) money" lncludes any currency cheque promlssory noLe leLLer of credlL drafL pay
order Lravellers cheque money order posLal remlLLance and oLher slmllar lnsLrumenLs
buL does noL lnclude currency LhaL ls held for lLs numlsmaLlc value
(c) gross amounL charged" lncludes paymenL by cheque credlL card deducLlon from
accounL and any form of paymenL by lssue of credlL noLes or deblL noLes and 'book
ad[usLmenL and any amounL credlLed or deblLed as Lhe case may be Lo any accounL
wheLher called Suspense accounL" or by any oLher name ln Lhe books of accounL of a person llable Lo
pay servlce Lax where Lhe LransacLlon of Laxable servlce ls wlLh any
assoclaLed enLerprlse
( Sec67 of llnance AcL1994)
lncluslon ln or Lxcluslon from value of cerLaln expendlLure or cosL (1) Where any
expendlLure or cosLs are lncurred by Lhe servlce provlder ln Lhe course of provldlng Laxable
servlce all such expendlLure or cosLs shall be LreaLed as conslderaLlon for Lhe Laxable
servlce provlded or Lo be provlded and shall be lncluded ln Lhe value for Lhe purpose of
charglng servlce Lax on Lhe sald servlce
8ule 3(1) of Servlce 1ax (ueLermlnaLlon of value) 8ules2006)
(2) 1he expendlLure or cosLs lncurred by Lhe servlce provlder as a pure agenL of Lhe
reclplenL of servlce shall be excluded from Lhe value of Lhe Laxable servlce lf all Lhe
followlng condlLlons are saLlsfled namely
(l) Lhe servlce provlder acLs as a pure agenL of Lhe reclplenL of servlce when he
makes paymenL Lo Lhlrd parLy for Lhe goods or servlces procured
(ll) Lhe reclplenL of servlce recelves and uses Lhe goods or servlces so procured
by Lhe servlce provlder ln hls capaclLy as pure agenL of Lhe reclplenL of
servlce
(lll) Lhe reclplenL of servlce ls llable Lo make paymenL Lo Lhe Lhlrd parLy
(lv) Lhe reclplenL of servlce auLhorlzes Lhe servlce provlder Lo make paymenL on
hls behalf
(v) Lhe reclplenL of servlce knows LhaL Lhe goods and servlces for whlch paymenL
has been made by Lhe servlce provlder shall be provlded by Lhe Lhlrd parLy
(vl) Lhe paymenL made by Lhe servlce provlder on behalf of Lhe reclplenL of
servlce has been separaLely lndlcaLed ln Lhe lnvolce lssued by Lhe servlce
provlder Lo Lhe reclplenL of servlce
(vll) Lhe servlce provlder recovers from Lhe reclplenL of servlce only such amounL
as has been pald by hlm Lo Lhe Lhlrd parLy and
(vlll) Lhe goods or servlces procured by Lhe servlce provlder from Lhe Lhlrd parLy as
a pure agenL of Lhe reclplenL of servlce are ln addlLlon Lo Lhe servlces he
provldes on hls own accounL
8ule 3(2) of Servlce 1ax (ueLermlnaLlon of value) 8ules2006)
(l) ClarlflcaLlons lssued by Lhe 8oard/MlnlsLry
PealLh Servlce (1) WlLh Lhe change ln Lhe sLyle of funcLlonlng of Lhe buslness
organlzaLlons healLh checkup ls a rouLlne faclllLy provlded by Lhe employers Lo Lhelr employees 1he
maln purpose ls Lo ensure LhaL Lhe producLlvlLy of Lhe organlzaLlon ls
noL adversely affecLed due Lo lll healLh of lLs employees Such acLlvlLles commonly
known as corporaLe healLh checkup schemes are underLaken by deslgnaLed hosplLals
ln order Lo deLecL any medlcal lndlcaLor or Lo ensure Llmely dlagnosls of any dlsease so
LhaL prophylacLlc measures can be Laken ln such cases Lhe hosplLal provldlng Lhese
servlces charge Lhe employer le Lhe buslness organlzaLlon and lL consLlLuLes
expendlLure for Lhe laLLer ln cerLaln cases (for example ln case of fllghL crew) prefllghL
checkups are conducLed noL only Lo LesL Lhe flLness levels buL also Lo rule ouL Lhe
posslblllLy f Lhe flylng crew belng under lnLoxlcaLlon Such healLh checkup schemes are
belng broughL wlLhln Lhe amblL of servlce Lax under Lhe new servlce
(2) A large number of healLh lnsurance schemes are belng offered by Lhe lnsurance
companles under whlch charges for hosplLallzaLlon surgery posLsurglcal nurslng eLc
are generally pald by Lhe lnsurance company Such lnsurance pollcles whlch fall under
Lhe caLegory of general lnsurance servlce are already Laxable under general
lnsurance servlce an lnsurance company ls a servlce provlder Lo lLs cllenLs under Lhe
proposed new servlce Lax ls also belng lmposed on Lhe medlcal charges pald by Lhe
lnsurance companles Lo Lhe hosplLals on behalf of a buslness enLlLy for lLs employees
As such Lhe lnsurance company would be Lhe servlce recelver and Lhe Lax pald by Lhe
hosplLal would be avallable Lo Lhe lnsurance companles as credlL
(3) 1he Lax on Lhe above menLloned healLh servlce would be payable only of and Lo
Lhe exLenL Lhe paymenL of such medlcal checkup or LreaLmenL eLc ls made dlrecLly by
Lhe buslness enLlLy or Lhe lnsurance company Lo Lhe hosplLal or medlcal esLabllshmenL
Any addlLlonal amounL pald by Lhe lndlvldual (le Lhe employee or Lhe lnsured as Lhe
case may be) Lo Lhe hosplLal would noL be sub[ecLed Lo servlce Lax 1hls ls Lo ensure
LhaL an lndlvldual ls noL requlred Lo pay a Lax for whlch he cannoL Lake credlL
vlde Ml(u8) leLLer uClno334/1/201018u daLed 26/2/2010
(C) LxempLlon Lxcluslon
1 LxempLlon Lo Small Scale Servlce rovlders
ln exerclse of Lhe powers conferred by subsecLlon (1) of secLlon 93 of Lhe
llnance AcL 1994 (32 of 1994) (herelnafLer referred Lo as Lhe sald llnance AcL) Lhe CenLral
CovernmenL on belng saLlsfled LhaL lL ls necessary ln Lhe publlc lnLeresL so Lo do hereby
exempLs Laxable servlces of aggregaLe value noL exceedlng 1en lakh* rupees ln any
flnanclal year from Lhe whole of Lhe servlce Lax levlable Lhereon under secLlon 66 of Lhe sald
llnance AcL
rovlded LhaL noLhlng conLalned ln Lhls noLlflcaLlon shall apply Lo
(l) Laxable servlces provlded by a person under a brand name or Lrade name
wheLher reglsLered or noL of anoLher person or
(ll) such value of Laxable servlces ln respecL of whlch servlce Lax shall be pald by such
person and ln such manner as speclfled under subsecLlon (2) of secLlon 68 of Lhe
sald llnance AcL read wlLh Servlce 1ax 8ules1994
2 1he exempLlon conLalned ln Lhls noLlflcaLlon shall apply sub[ecL Lo Lhe followlng
condlLlons namely (l) Lhe provlder of Laxable servlce has Lhe opLlon noL Lo avall Lhe exempLlon
conLalned ln
Lhls noLlflcaLlon and pay servlce Lax on Lhe Laxable servlces provlded by hlm and such
opLlon once exerclsed ln a flnanclal year shall noL be wlLhdrawn durlng Lhe remalnlng parL
of such flnanclal year
(ll) Lhe provlder of Laxable servlce shall noL avall Lhe CLnvA1 credlL of servlce Lax pald on
any lnpuL servlces under rule 3 or rule 13 of Lhe CLnvA1 CredlL 8ules 2004 (hereln afLer
referred Lo as Lhe sald rules) used for provldlng Lhe sald Laxable servlce for whlch
exempLlon from paymenL of servlce Lax under Lhls noLlflcaLlon ls avalled of
(lll) Lhe provlder of Laxable servlce shall noL avall Lhe CLnvA1 credlL under rule 3 of Lhe
sald rules on caplLal goods recelved ln Lhe premlses of provlder of such Laxable servlce
durlng Lhe perlod ln whlch Lhe servlce provlder avalls exempLlon from paymenL of servlce
Lax under Lhls noLlflcaLlon
(lv) Lhe provlder of Laxable servlce shall avall Lhe CLnvA1 credlL only on such lnpuLs or
lnpuL servlces recelved on or afLer Lhe daLe on whlch Lhe servlce provlder sLarLs paylng
servlce Lax and used for Lhe provlslon of Laxable servlces for whlch servlce Lax ls payable
(v) Lhe provlder of Laxable servlce who sLarLs avalllng exempLlon under Lhls noLlflcaLlon
shall be requlred Lo pay an amounL equlvalenL Lo Lhe CLnvA1 credlL Laken by hlm lf any ln
respecL of such lnpuLs lylng ln sLock or ln process on Lhe daLe on whlch Lhe provlder of
Laxable servlce sLarLs avalllng exempLlon under Lhls noLlflcaLlon
(vl) Lhe balance of CLnvA1 credlL lylng unuLlllsed ln Lhe accounL of Lhe Laxable servlce
provlder afLer deducLlng Lhe amounL referred Lo ln subparagraph (v) lf any shall noL be
uLlllsed ln Lerms of provlslon under subrule (4) of rule 3 of Lhe sald rules and shall lapse on
Lhe day such servlce provlder sLarLs avalllng Lhe exempLlon under Lhls noLlflcaLlon
(vll) where a Laxable servlce provlder provldes one or more Laxable servlces from one or
more premlses Lhe exempLlon under Lhls noLlflcaLlon shall apply Lo Lhe aggregaLe value of
all such Laxable servlces and from all such premlses and noL separaLely for each
premlses or each servlces and
(vlll) Lhe aggregaLe value of Laxable servlces rendered by a provlder of Laxable servlce
from one or more premlses does noL exceed rupees *Len lakhs ln Lhe precedlng flnanclal
year
3 lor Lhe purposes of deLermlnlng aggregaLe value noL exceedlng Len*lakh rupees Lo avall
exempLlon under Lhls noLlflcaLlon ln relaLlon Lo Laxable servlce provlded by a goods
LransporL agency Lhe paymenL recelved Lowards Lhe gross amounL charged by such goods
LransporL agency under secLlon 67 for whlch Lhe person llable for paylng servlce Lax ls as
speclfled under subsecLlon (2) of secLlon 68 of Lhe sald llnance AcL read wlLh Servlce 1ax
8ules 1994 shall noL be Laken lnLo accounL
LxplanaLlon lor Lhe purposes of Lhls noLlflcaLlon
(A) brand name" or Lrade name" means a brand name or a Lrade name wheLher
reglsLered or noL LhaL ls Lo say a name or a mark such as symbol monogram logo
label slgnaLure or lnvenLed word or wrlLlng whlch ls used ln relaLlon Lo such speclfled
servlces for Lhe purpose of lndlcaLlng or so as Lo lndlcaLe a connecLlon ln Lhe course of
Lrade beLween such speclfled servlces and some person uslng such name or mark wlLh
or wlLhouL any lndlcaLlon of Lhe ldenLlLy of LhaL person
(8) aggregaLe value noL exceedlng *Len lakh rupees means Lhe sum LoLal of flrsL
consecuLlve paymenLs recelved durlng a flnanclal year Lowards Lhe gross amounL as
prescrlbed under secLlon 67 of Lhe sald llnance AcL charged by Lhe servlce provlder
Lowards Laxable servlces Llll Lhe aggregaLe amounL of such paymenLs ls equal Lo Len
lakh rupees buL does noL lnclude paymenLs recelved Lowards such gross amounL whlch
are exempL from whole of servlce Lax levlable Lhereon under secLlon 66 of Lhe sald
llnance AcL under any oLher noLlflcaLlon
4 1hls noLlflcaLlon shall come lnLo force on Lhe 1sL day of Aprll 2003 noLlflcaLlon no 6/2003S1
daLed 132003 *Amended by noLfnno 8/2008S1 daLed
01032008
2 Servlces Lo un Agencles
Servlces provlded Lo unlLed naLlons or an lnLernaLlonal CrganlzaLlons are exempL
noLlflcaLlon no 16/2002S1 daLed 282002
3 LxporL of servlce Any servlce whlch ls Laxable under clause 103 of SecLlon 63 may
be exporLed wlLhouL paymenL of servlce Lax
( 8ule 4 of LxporL of Servlces 8ules2003)
4 LxempLlon Lo servlces provlded Lo a developer of SLZ or a unlL of SLZ
LxempLs Lhe Laxable servlces speclfled ln clause (103) of secLlon 63 of Lhe sald llnance AcL
whlch are provlded ln relaLlon Lo Lhe auLhorlzed operaLlons ln a Speclal Lconomlc Zone and
recelved by a developer or unlLs of a Speclal Lconomlc Zone wheLher or noL Lhe sald
Laxable servlces are provlded lnslde Lhe Speclal Lconomlc Zone from Lhe whole of Lhe
servlce Lax levlable Lhereon under secLlon 66 of Lhe sald llnance AcL sub[ecL Lo cerLaln
condlLlons ( 8efer noLlflcaLlon for deLalls)
noLlflcaLlon no 09/2009 S1 daLed 03032009 (rlor Lo 03032009 noLfnno4/2004S1
daLed 31032004)
3 LxempLlon Lo value of goods maLerlal sold by servlce provlder ln exerclse of
Lhe powers conferred by secLlon 93 of Lhe llnance AcL 1994 (32 of 1994) Lhe CenLral
CovernmenL belng saLlsfled LhaL lL ls necessary ln Lhe publlc lnLeresL so Lo do hereby
exempLs so much of Lhe value of all Lhe Laxable servlces as ls equal Lo Lhe value of goods
and maLerlals sold by Lhe servlce provlder Lo Lhe reclplenL of servlce from Lhe servlce Lax
levlable Lhereon under secLlon (66) of Lhe sald AcL sub[ecL Lo condlLlon LhaL Lhere ls
documenLary proof speclflcally lndlcaLlng Lhe value of Lhe sald goods and maLerlals
(noLlflcaLlon no 12/2003S1 daLed 20062003 effecLlve from 01072003)
6 LxempLlon Lo Laxable servlces provlded by 18l and S1L All Laxable servlces
provlded by a 1echnology 8uslness lncubaLor (18l) or a Sclence and 1echnology
LnLrepreneurshlp ark (S1L) recognlzed by Lhe naLlonal Sclence and Lechnology
LnLrepreneurshlp uevelopmenL 8oard (nS1Lu8) of Lhe ueparLmenL of Sclence and
1echnology CovL of lndla from Lhe whole of Lhe servlce Lax levlable Lhereon sub[ecL Llo
cerLaln condlLlons and procedures ( 8efer noLlflcaLlon for deLalls)
(noLlflcaLlon no09/2007 S1 daLed 01032007)
7 LxempLlon Lo Laxable servlces provlded by enLrepreneurs locaLed wlLhln Lhe
premlses of 18l or S1L All Laxable servlces provlded by an enLrepreneur locaLed
wlLhln Lhe premlses of a 1echnology 8uslness lncubaLor (18l) or a Sclence and 1echnology
LnLrepreneurshlp ark (S1L) recognlzed by Lhe naLlonal Sclence and Lechnology
LnLrepreneurshlp uevelopmenL 8oard (nS1Lu8) of Lhe ueparLmenL of Sclence and 1echnology CovL of
lndla from Lhe whole of Lhe servlce Lax levlable Lhereon sub[ecL Lo
cerLaln condlLlons and procedures ( 8efer noLlflcaLlon for deLalls)
(noLlflcaLlon no10/2007 S1 daLed 01032007)
8 LxempLlon Lo servlces provlded Lo lorelgn ulplomaLlc Mlsslons or Consular osL
ln lndla All servlces provlded by any person for Lhe offlclal use of a lorelgn ulplomaLlc
Mlsslon or Consular osL ln lndla are exempLed from servlce Lax sub[ecL Lo cerLaln
condlLlons and procedures (8efer noLlflcaLlon for deLalls)
(noLlflcaLlon no 33/2007S1 daLed 23032007)
9 LxempLlon Lo servlces provlded for personal use of a famlly member of
ulplomaLlc AgenL or Career Consular Cfflcers posLed ln lorelgn ulplomaLlc
Mlsslon/Consular osL ln lndla All servlces provlded by any person for personal use
of famlly member of ulplomaLlc AgenLs or Career Consular offlcers posLed ln a lorelgn
ulplomaLlc Mlsslon or Consular osL ln lndla are exempLed from servlce Lax sub[ecL Lo
cerLaln condlLlons and procedures (8efer noLlflcaLlon for deLalls)
(noLlflcaLlon no 34/2007S1 daLed 23032007)
(P) lmporLanL Case Laws no lmporLanL case law