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AUTHORITY FOR ADVANCE RULINGS
(CENTRAL EXCISE, CUSTOMS & SERVICE TAX)
NEW DELHI
PRESENT
Justice Syed Mohammed
Quadri
(Chairman) |
Mr. Somnath Pal
(Member) |
Dr. B.A.Agrawal
(Member |
Ruling No. AAR/01(ST)/2005
in
Application No.AAR/111(ST)/2004
Applicant
Shri Kartar Singh Kochar
S/o late Shri Sucha Singh
C-30, Usha Niketan
New Delhi-110016
Commissioner
concerned Commissioner, Service Tax,
Delhi
Present : for the
applicant
for the Commissioner Shri P.S. Narasimha, Advocate
Shri Chandrashekar Jha, Advocate
Shri A.K. Roy, Joint CDR
CESTAT, New Delhi.
R U L I N G
( By Mr. Somnath Pal, Member )
Shri Kartar Singh Kochar, S/o late
Shri Sucha Singh, resident of C-30, Usha Niketan, New Delhi-110016 (hereinafter
referred to as the applicant) has filed an application for advance rulings in
which originally three questions were raised. The applicant is setting up a
joint venture in pandal and shamiana business in New Delhi alongwith Ms. Deep
Kaur who is a non-resident and who happens to be applicant's daughter. Two of
the three questions which were originally raised were subsequently reframed.
The revised three questions read as under :-
I |
Under which classification
i.e. (a) to (zzy) of sub-section 105 of section 65 of Chapter-V
of the Finance Act, 1994 are supply of furniture, fixtures, lights and light
fittings, PA system and other articles, without providing/supplying/erecting a
pandal or shamiana are covered |
II |
Are pandals and shamianas supplied
for Hindu marriages exempted from service tax as per the Notification F.No.
B2/A/2000/TRU dated 10th September, 2004. |
III |
Is cartage charge for
transportation of material from godown to different sites inclusive in the total
bill for the purpose of charging service tax. Can its credit be availed under
96C(2)(e)." |
During the hearing before us the Ld.
Counsel representing the applicant stated that they are not pressing the third
question and therefore advance ruling is being sought only in respect of the
first two questions.
2.
We have heard the Ld. Counsel of the
applicant and also the Joint CDR on behalf of the Commissioner.
3. The first question is on the
classification of the proposed service, namely, "supply of furniture, fixtures,
lights and light fittings, PA system and other articles, without
providing/supplying/erecting a pandal and shamiana". The applicant has referred
to clauses (a) to (zzy) of sub-section (105) of section 65 of Chapter-V of the
Finance Act, 1994 as amended from time to time (in short, the Act). On perusal
of these clauses it appears to us that the only possible entry which may be
considered in the context of the type of service that has been mentioned in the
question by the applicant is clause (zzw). This clause reads as under :
"to a client, by a pandal or shamiana contractor
in relation to a pandal or shamiana in any manner and also includes the
services, if any, provided or to be provided as a caterer".
Sub-section (105) of section 65 of
the Act defines "taxable service" in the context of various types of services
which are provided or to be provided as has been enumerated in different clauses
under this sub-section. From the language of the question framed by the
applicant, one possibility appears to be that the applicant is envisaging a
situation in which he would not himself provide, supply or erect a pandal but
would only supply furniture, fixtures etc. to a pandal or shamiana (provided,
supplied or erected by some other person). The other possibility may be that
the applicant would supply furniture, fixtures etc. to a place which is not a
pandal or shamiana as defined in sub-section (77a) under section 65 of the Act.
We would examine the issue from both these angles.
4. The term "pandal or shamiana
contractor" has been defined in sub-section(77b) under section 65 of the Act, as
meaning "a person engaged in providing any service, either directly or
indirectly, in connection with the preparation, arrangement, erection or
decoration of a pandal or shamiana and includes the supply of furniture,
fixtures, lights and lighting fittings, floor coverings and other articles for
use therein". Sub-section (77a) defines "pandal or shamiana" as "a place
specially prepared or arranged for organizing an official, social or business
function". It needs to be noted at this stage itself that supply of "PA system
and other articles" [connected with sound system] is not included in the
definition of "pandal or shamiana contractor".
5. From the definition of "pandal or
shamiana contractor" it is clear that a person engaged in providing any service
to a client, either directly or indirectly, would be treated as a pandal or
shamiana contractor as long as he is engaged in providing a service in
connection with the preparation, arrangement, erection or decoration of a pandal
or shamiana. The second part of this definition which is inclusive in nature
covers supply of furniture, fixtures, lights and lighting fittings, floor
coverings and other articles for use therein. The words "for use therein"
reaffirms the proposition that such supply has also to be in connection with
preparation, arrangement, erection or decoration of a pandal or shamiana. In
other words, the type of service which a person has to provide in order to
become a pandal or shamiana contractor would necessarily be in connection with a
pandal or shamiana as defined in sub-section (77a) of section 65 of the Act. As
long as this criterion is satisfied, the person will be covered by the
definition of pandal or shamiana contractor and any of the aforementioned
services provided by such a contractor to a client either directly or
indirectly, will be classifiable as a taxable service under clause (zzw) of
sub-section (105) of section 65 of the Act. It is not necessary that a person
who is providing any service, whether directly or indirectly, in connection with
the preparation, arrangement, erection or decoration of a pandal or shamiana or
supplying furniture, fixtures, lights and lighting fittings, floor coverings
and other articles for use therein, would have to provide, supply or erect a
pandal or shamiana himself to qualify as a pandal or shamiana contractor. In
order to do so, any service which he provides has to be in connection with a
pandal or shamiana (may be provided, supplied or erected by some other person)
as envisaged in the definition of "pandal or shamiana contractor". Therefore,
even if the applicant does not provide, supply or erect a pandal or shamiana,
any service provided by him, either directly or indirectly, to a client in
connection with the preparation, arrangement, erection or decoration of a pandal
or shamiana, including supply of furniture, fixtures, lights and lighting
fittings, floor coverings and other articles for use therein, would be
classifiable as taxable service under clause (zzw).
As regards the other possibility,
the answer follows as a corollary to the above. Mere supply of furniture,
fixtures, lights and lighting fittings, floor coverings and other articles for
use, for a place which is not a pandal or shamiana as defined in sub-section
(77a) will not bring the supplier within the definition of a pandal or shamiana
contractor and in the result such service will not be classifiable under clause
(zzw) as a taxable service.
6. Turning now to the second question,
we find that this has been raised by the applicant treating the communication
F.No. B2/8/2004-TRU, dated 10th September, 2004 (wrongly quoted by
the applicant as B2/A/2000/TRU in the reframed question no. II in the written
submission before the Authority), issued under the signature of Joint
Secretary(TRU), Ministry of Finance, Department of Revenue (Tax Research Unit)
as an exemption notification. Perusal of this letter makes it clear that this
has been issued as an internal communication to the senior officials in charge
of various field formations under the Revenue Department, explaining the scope
of the changes brought in with the enactment of the Finance Bill (No.2), 2004
w.e.f. 10.9.2004. The entire explanation is in the context of new services
which came under the service tax levy with the aforesaid enactment. This
communication, by no stretch of imagination, can be treated as an exemption
notification which can be issued by the Central Government under section 93 of
Chapter-V of the Act. The particular sub-para, namely, 11.4 in this letter
which has been relied upon by the applicant is only in the form of a
clarification for the guidance of the field officials and in no way can be
treated as a notification granting exemption under Section 93 of the Act. In
fact, where reference has been made in this clarificatroy letter to
abatement/exemptions, say, as in sub-para 11.3, the corresponding notification
no. has been specifically indicated. We are, therefore, not in a position to
agree with the applicant's contention that this question is covered by section
96C(2)(d) which permits an applicant to raise a question on "applicability of
notifications issued under Chapter-V". This being the position, we have no
other alternative but to hold that no advance ruling can be pronounced on this
question.
7. Having carefully considered the
matter, we rule on the aforementioned two questions, as follows :-
Qn.I As long as the supply
of furniture, fixtures, lights and lighting fittings is in connection with the
preparation, arrangement, erection or decoration of a pandal or shamiana as
defined in sub-section (77a) of the Act, the applicant would be covered by the
definition of 'pandal or shamiana contractor' given in sub-section (77b), no
matter whether or not the applicant himself provides/supplies/erects the pandal
or shamiana. In that event, supply of above items by the applicant to a client
would be classifiable as a taxable service under clause (zzw) of sub-section
(105) of section 65 of the Act, otherwise it will not fall under that clause.
Supply of "PA system and other articles" [connected with sound system] is not
covered by the definition of 'pandal or shamiana contractor' and hence this
would not come within the purview of clause (zzw) of section 65(105) of the Act.
Qn.II This is not covered
by section 96C(2)(d) of the Act and hence no advance ruling can be pronounced
thereon.
(B.A. AGRAWAL)
Member
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(Justice S.S.M.
Quadri)
Chairman |
(SOMNATH PAL)
Member |
Pronounced in
the open court on the 23rd day of August, 2005.
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