News Flash
  • Compensation Notifications, CGST Rules, 2017 as amended upto 23.04.2019
  • "Outsourcing for photocopying of official documents in office premises" for the OFFICE OF DGGI DELHI ZONAL UNIT, NEW DELHI.Click Here
  • OM dated 24.04.2019 regarding AISL of Superintendents Customs (Pre.) for the period 01.07.2001 to 30.06.2010
  • CGST Rules, 2017 as amended up to 23.04.2019 have been uploaded
  • "One-Day Training on "Inspection, Search, Seizure and Arrest under GST Law" for Group 'A' officers of CBIC on 17th May, 2019 at NACIN, Faridabad"Click Here
  • Suggestion are invited from Industry and Trade Associations for the General Budget 2019-20 .Click Here
  • "Two-Days Training on "Enforcement of Intellectual Property Rights (IPRs)" for officers of CBIC on 29-30 April, 2019 at NACIN, Faridabad" .Click Here
  • Circular for engagement of Consultants in the GST Council Sectt.
  • Circulars clarifying various issues related to GST issued.
  • RoD Order issued for filing an application for revocation of cancellation of registration for specified taxpayers.
  • Notifications issued specifying procedure for quarterly tax payment and annual filing of return for specified taxpayers and bringing into force provisions of rule 138E of the CGST Rules and amending CGST Rules
  • Declaration of ADG, DRI as Head of Department.Click Here
  • Notification to extend the due date for furnishing of returns in FORM GSTR-3B for the Month of March, 2019 to 23.04.2019.
  • Press Release regarding examination for GST Practitioners on 14.06.2019.Click Here
  • Calling of nomination for the Train the Trainer Workshop for Master Trainers on combating illegal trade in HCFCs being conducted by NACIN from 26th to 28th June 2019 at Gangtok, Sikkim.Click Here
  • Due date for furnishing of return in FORM GSTR-3B for the month of March, 2019 extended from 20.04.2019 to 23.04.2019.
  • Training on Intellectual Property Rights at NACIN, Faridabad rescheduled to 29-30 April, 2019. Click Here
  • Last date for receiving applications for the post of Superintendent on deputation extended upto 15.05.2019by NACIN, Kanpur. Letter Download from www.nacenkanpur.gov.in
  • Inventory Check and condition of UPS,Line Printer & Print Servers in field formation - reg Click Here
  • Filling up the posts of Administrative Officer, Tax assistant and lower division clerk in the DGGST, Eastern zonal unit on loan/deputation basis.Click Here
  • Circular on Deputation -Willingness for the Posts of Administrative Officer, Inspector, Personal Secretary (P.S.) & Tax Assistant in the Zonal Campus of National Academy of Customs, Indirect Taxes & Narcotics (NACIN), BhopalClick Here
  • Notification to extend the due dates for furnishing FORM GSTR-1 and GSTR-7 for the month of March 2019 issued
  • Tender Notice for hiring of one operational vehicle for NACIN, ChandigarhClick Here
  • Tender Notice inviting for amc for maintenance of epabx & intercom systemClick Here
  • World Customs Organisation welcomes the establishment of the Indian Customs Cooperation Fund. -click here
  • Updated versions of GST - Concept and Status, and GST - An Update as on 01/04/2019 have been uploaded
  • Circular clarifying issues regarding exercise of option to pay tax under notification No. 2/2019- CT(R) dt 07.03.2019 issued.
  • Tentative Annual Training Calendar of National Academy of Customs, Indirect Taxes & Narcotics, Faridabad for the F.Y. 2019-20Click Here
  • CGST Rules, 2017 as amended up to 01.04.2019 have been uploaded.
  • Shortlist of applicants being called for interview for empanelment of Senior/Junior Standing Counsels. Click Here
  • For new rate of CGST in the real estate (residential unit) notification nos. 3/2019, 4/2019, 5/2019, 6/2019, 7/2019, 8/2019- Central Tax (Rate) and 16/2019 - Central Tax (amendment to CGST rule 42 and 43 refers), all dated 29-03-2019 may be referred.
  • Notification to make Second Amendment (2019) to CGST Rules issued.
  • Written Examination of candidates qualified in swimming test for Marine staff recruitment of Bhubaneswar Customs (Preventive) Commissionerate will be held on 31st March 2019Click Here
  • Details of Nodal Offices of Seva bhoj Yojana (SBY) & e-commerce operators - reg Click Here || Annexure Click Here
  • Circulars clarifying various issues related to GST issued.
  • Draft Seniority List in the grade of Chemical Examiner, Grade-I under CRCL, CBIC - comments from stakeholders invited
  • Notification to extend the due date for furnishing of FORM GST ITC-04 for theperiod July 2017 to March 2019 till 30th June 2019 issued.
  • Marks of Deptt. Exam. for Inspectors of C.EX. held in 04.12.2018 to 07.12.2018 declared. Nodal Officers may download marks-sheet from their dashboard under www.nacenkanpur.gov.in alongwith forwarding letter.
View all

Section 37B Order No .1/1/2002-ST

F.NO. 177/5/2001 - CX4
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs

26th February, 2002

37B Order No .1/1/2002-ST

Sub.: Providing service of third party inspection and certification whether liable to Service Tax - regarding

In exercise of the power conferred under Section 37B of the Central Excise Act, 1944 (as made applicable to Service Tax by Section 83 of the Finance Act,1994), the Central Board of Excise and Custom considers it necessary, for the purpose of uniformity in connection with classification of services, to issue the following instructions.

2.      Doubts have been raised as to whether " third party inspections and certifications" carried out by certifying agencies in respect of marine as well as non-marine equipments, can be considered as a service provided by a "consulting engineer" or not.

3.      This matter was also raised by two service providers before the Mumbai High Court, in Writ Petition No 1436/2000. The petition was disposed of by the Hon'ble Court on 11.9.2001 with directions to the Board to issue a Section 37B Order in the matter for ensuring uniformity.

4.      The two service providers were heard in the matter on 4th January, 2002. Views of the field formations were also procured. Some of the types of inspection and certification work carried out by the said two service providers relate to :-

1. MARINE
(i) New Construction
(ii) Periodical Surveys
(iii) Marine equipment and components
(iv) Type approval
(v) Marine specification
(vi) Confirmation of class
2. NON-MARINE
(i) Plan approval and Inspection
(ii) ASME Inspection Service
(iii) System Integrity and Management

5.      It is observed that as per clause (18) of Section 65 of the Finance Act,1994, "Consulting Engineer" means any professionally qualified engineer or an engineering firm who, either directly or indirectly, renders any advice, consultancy or technical assistance in any manner to a client in one or more disciplines of engineering".

6.      The issue, therefore, is whether the service of 'third party inspection and certification' carried out by a professionally qualified engineer or an engineering firm can fall under the category of advice, consultancy or technical assistance.

7.      The main point raised by some service providers is that where they are carrying out any certification as required by any statute it cannot come under the purview of either consultancy, advice or technical assistance. As for example, some of them have been authorized u/s.9 of the Merchant Shipping Act, 1958, to survey and classify ships and issue necessary certification. [refer S.O.No.769(E) dt.7.11.97 issued under section 9 of the Act ibid].

8.      In the case of 'Management Consultants', the Board had clarified, in Para 11 of the sec.37B Order No. 1/1/2001 - ST dt.27.6.2001, that "..........banks who are required to play only a statutory role under any Act or regulation, such as Takeover Regulations of SEBI, and do not provide any advice or consultancy but merely verify and submit a report to the concerned authorities, in connection with merger and acquisition transaction, are not treated as Management Consultants..........". The definition of "Management Consultant" also uses the words 'consultancy, advice or technical assistance'.

9.      Certificates given under authority of any statute/international protocol/code/convention, cannot be considered to be a consultancy job. It is then to be examined whether this activity can come under the purview of advice or technical assistance. An advice is generally understood to be optional in nature and has no statutory force. It is upto the client to accept the advice or not. The activity of certification will therefore not fall under the category of advice. As regards 'technical assistance', it is observed that an assistance is normally for the purpose of achieving a particular aim or result. A certificate given by, say, the Boiler Inspector under the Factory's Act, 1948, about the safety of a boiler, cannot be considered to be an 'assistance' to the person using the said boiler in his factory. Thus, if a certifying agency issues a 'Cargo ship safety construction certificate' u/s.299A(i) of the Indian Merchant Shipping Act,1958, it cannot be considered to be either an advice or a technical assistance.

10.      To issue certificates under the authority of any statute it will obviously be necessary for the certifying agency to conduct some survey/inspection. Thus the survey/inspection by an agency for the purposes of issuing certificates by the same agency under an authority of law, will also not amount to consultancy, advice or technical assistance. If, however, the shipping company gets the ship surveyed or inspected by another, agency before taking it for certification by an authorized agency, only then can it be said that the first agency is providing some technical assistance or advice.

11.      It will, therefore, be essential to examine each activity of a service provider on the basis of facts, the terms of agreement between the assessee and the clients and the corresponding provisions of Indian or International Statute/Convention/Protocol or Code, to determine whether the certificate being given is under the authority of any such statute, convention, protocol or code. If it is so, the payment received for that service will not be taxable under the head " consulting engineer".

12.      Any other inspection, survey, assessment, technical assistance, consultancy, recommendation, advice, undertaken/provided directly or indirectly, by the assessee would be liable to Service Tax under the head 'Consulting Engineer'.

13.      Suitable Trade Notice may be issued for the information of the trade.

14.      Hindi version will follow.

15.      The receipt of this order may kindly be acknowledged.

Suraksha Katiyar
Under Secretary