7. ATM Operation, Maintenance or Management
Services
(A) Date of Introduction:
01.05.2006 (Notification No. 15/2006-S.T., dated
24.04.2006)
(B) Definition and scope of service:
"Taxable Service" means any service provided or to be provided
to any person, by any other person, in relation to automated teller machine
operations, maintenance or management service, in any manner;
[Section 65 (105) (zzzk) of Finance Act, 1994 as amended]
"Automated Teller Machine" means an interactive
automatic machine designed to dispense cash, accept deposit of cash, transfer
money between bank accounts and facilitate other financial transactions;
[Section 65(9a)
of Finance Act, 1994 as amended]
"Automated Teller Machine Operations, Maintenance or
Management Service"
means any service provided in relation to automated teller machines and
includes site selection, contracting of location, acquisition, financing,
installation, certification, connection, maintenance, transaction processing,
cash forecasting, replenishment, reconciliation and value-added services;
[Section 65 (9b) of Finance Act, 1994 as
amended]
(C) Rate of Tax & Accounting Code:
|
Rate of Tax
|
Accounting Code
|
Service Tax
|
10% of the value of services
|
00440346
|
Education Cess
|
2% of the service tax payable
|
00440298
|
Secondary and Higher Education cess
|
1% of the service tax payable.
|
00440426
|
Other -Penalty/interest
|
As levied or applicable
|
00440347
|
( Rate of tax
is effective from 24.02.2009.)
( D ) Classification of Taxable Services:
(1)
The classification of taxable services shall be determined according to the terms of the
sub-clauses (105) of section 65;
(2) When for any reason , a taxable service is
prima facie, classifiable under two or
more sub-clauses of clause (105) of section 65, classification shall be
effected as follows :-
(a) the sub-clause which provides the most specific description
shall be preferred to sub-clauses providing a more general description;
(b) composite
services consisting of a combination of different services which cannot be
classified in the manner specified in clause (a), shall be classified as if they
consisted of a service which gives them their essential character, in so far as
this criterion is applicable;
(c) when a service cannot be classified in the manner specified
in clause (a) or clause (b), it shall be classified under the sub-clause which
occurs first among the sub-clauses which equally merits consideration.
( Sec.65A of
Finance Act,1994)
(E)
Valuation of taxable services for charging Service tax
(1)
Service
tax chargeable on any taxable service with reference to its value shall,-
(i)
in a case where the provision of service is for a consideration in money, be
the gross amount charged by the service provider for such service provided or
to be provided by him;
(ii) in a case where
the provision of service is for a consideration not wholly or partly consisting
of money, be such amount in money, with the addition of service tax charged, is
equivalent to the consideration;
(iii) in a case where the provision of service is for a
consideration which is not ascertainable, be the amount as may be determined in
the prescribed manner.
(2)
Where the gross amount charged by a service provider, for the service provided
or to be provided is inclusive of service tax payable, the value of such
taxable service shall be such amount as, with the addition of tax payable, is
equal to the gross amount charged.
(3) The gross amount
charged for the taxable service shall include any amount received towards the
taxable service before, during or after provision of such service.
(4) Subject
to the provisions of sub-sections (1), (2) and (3), the value shall be
determined in such manner as may be prescribed.
Explanation.-For the purposes of this section,-
(a) "consideration"
includes any amount that is payable for the taxable services provided or to be
provided;
(b) "money" includes any currency, cheque, promissory note, letter of credit, draft, pay
order, travellers cheque,
money order, postal remittance and other similar instruments but does not
include currency that is held for its numismatic value;
(c) "gross amount charged" includes payment by cheque, credit card, deduction from account and any form of
payment by issue of credit notes or debit notes and 'book adjustment, and any
amount credited or debited, as the case may be, to any account, whether called
"Suspense account" or by any other name, in the books of account of a person
liable to pay service tax, where the transaction of taxable service is with any
associated enterprise.
( Sec.67
of Finance Act,1994)
Inclusion
in or Exclusion from value of certain expenditure or cost:
(1) Where any expenditure or costs are
incurred by the service provider in the course of providing taxable service,
all such expenditure or costs shall be treated as consideration for the taxable
service provided or to be provided and shall be included in the value for the
purpose of charging service tax on the said service.
[Rule 5(1) of Service
Tax (Determination of Value) Rules,2006)]
(2)
The
expenditure or costs incurred by the service provider as a pure agent of the
recipient of service, shall be excluded from the value of the taxable
service if all the following conditions are satisfied, namely:-
(i) the service provider acts as a pure agent of the recipient of
service when he makes payment to third party for the goods or services
procured;
(ii) the recipient of service receives and uses the goods or
services so procured by the service provider in his capacity as pure
agent of the recipient of service;
(iii) the recipient of service is liable to make payment to the
third party;
(iv) the recipient of service authorizes the service provider to
make payment on his behalf;
(v) the recipient of service knows that the goods and services
for which payment has been made by the service provider shall be provided
by the third party;
(vi) the payment made by the service provider on behalf of the
recipient of service has been separately indicated in the invoice issued by the
service provider to the recipient of service;
(vii) the
service provider recovers from the recipient of service only such amount as has
been paid by him to the third party; and
(viii)
the goods or services procured by the service
provider from the third party as a pure agent of the recipient of service are
in addition to the services he provides on his own account.
[Rule 5(2) of Service Tax
(Determination of Value) Rules,2006)]
(F) Clarifications issued by the Board /
Ministry:
ATM operations, maintenance or
management.-
ATMs (Automated
Teller Machines) may be owned by banks and other financial institutions who
outsource a number of activities related to ATMs such as operations,
maintenance or management of hardware and software, cash replenishment etc. In other cases, there is comprehensive
outsourcing of entire ATM related services.
Such outsourced services are taxable under this category. Some of the specific areas of outsourcing are
mentioned in the definition of ATM operations, maintenance or management.
(vide M.F(D.R) Letter D.O.F.No.334/4/2006-TRU
dated 28/2/2006)
(G)
Exemption & Exclusion:
1.
Exemption to Small Scale Service Providers:
In exercise of the powers
conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of
1994) (hereinafter referred to as the said Finance Act), the Central
Government, on being satisfied that it is necessary in the public interest so
to do, hereby exempts taxable services of aggregate value not exceeding Ten lakh*
rupees in any financial year from the whole of the service tax leviable thereon under section 66 of the said Finance Act:
Provided
that nothing contained in this notification shall apply to,-
(i)
taxable services provided by a person under a
brand name or trade name, whether registered or not, of another person; or
(ii)
such value of taxable services in respect
of which service tax shall be paid by such person and in such manner as
specified under sub-section (2) of section 68 of the said Finance Act read with
Service Tax Rules,1994.
2.The exemption contained in this notification shall apply subject to the
following conditions, namely:-
(i) the provider
of taxable service has the option not to avail the exemption contained in this
notification and pay service tax on the taxable services provided by him and
such option, once exercised in a financial year, shall not be withdrawn during
the remaining part of such financial year;
(ii) the provider of taxable service shall
not avail the CENVAT credit of service tax paid on any input services, under
rule 3 or rule 13 of the CENVAT Credit Rules, 2004 (herein after referred to as
the said rules), used for providing the said taxable service, for which
exemption from payment of service tax under this notification is availed of;
(iii) the provider of taxable service shall
not avail the CENVAT credit under rule 3 of the said rules, on capital goods
received in the premises of provider of such taxable service during the period
in which the service provider avails exemption from payment of service tax
under this notification;
(iv) the provider of taxable service shall
avail the CENVAT credit only on such inputs or input services received, on or
after the date on which the service provider starts paying service tax, and
used for the provision of taxable services for which service tax is payable;
(v) the provider of taxable service who
starts availing exemption under this notification shall be required to pay an
amount equivalent to the CENVAT credit taken by him, if any, in respect of such
inputs lying in stock or in process on the date on which the provider of
taxable service starts availing exemption under this notification;
(vi) the balance of CENVAT credit lying unutilised in the account of the taxable service provider
after deducting the amount referred to in sub-paragraph (v), if any, shall not
be utilised in terms of provision under sub-rule (4)
of rule 3 of the said rules and shall lapse on the day such service provider
starts availing the exemption under this notification;
(vii) where a taxable service provider
provides one or more taxable services from one or more premises, the exemption
under this notification shall apply to the aggregate value of all such taxable
services and from all such premises and not separately for each
premises or each services; and
(viii) the
aggregate value of taxable services rendered by a provider of taxable service
from one or more premises, does not exceed rupees *ten lakhs in the preceding financial
year.
3.
For the purposes of determining aggregate value not exceeding ten*lakh
rupees, to avail exemption under this notification, in relation to taxable service
provided by a goods transport agency, the payment received towards the gross
amount charged by such goods transport agency under section 67 for which the
person liable for paying service tax is as specified under subsection (2) of
section 68 of the said Finance Act read with Service Tax Rules, 1994, shall not
be taken into account.
Explanation.- For the purposes of this notification,-
(A) "brand name" or "trade name" means
a brand name or a trade name, whether registered or not, that is to say, a name
or a mark, such as symbol, monogram, logo, label, signature, or invented word
or writing which is used in relation to such specified services for the purpose
of indicating, or so as to indicate a connection in the course of trade between
such specified services and some person using such name or mark with or without
any indication of the identity of that person;
(B) "aggregate value not exceeding *ten lakh rupees
means the sum total of first consecutive payments received during a financial
year towards the gross amount, as prescribed under section 67 of the said
Finance Act, charged by the service provider towards taxable services till the
aggregate amount of such payments is equal to ten lakh
rupees but does not include payments received towards such gross amount which
are exempt from whole of service tax leviable thereon
under section 66 of the said Finance Act under any other notification.
4.
This notification shall come into force on the 1st day of April, 2005.
[Notification
No. 6/2005-ST, dated 1-3-2005. *Amended by Notfn.No.
8/2008-ST dated 01.03.2008]
2. Services
to UN Agencies
Services provided to
United Nations or an International Organizations are exempt.
[Notification No.
16/2002-ST, dated 2-8-2002]
3. Export of service:
Any service which
is taxable under clause 105 of Section 65 may be exported without payment of
service tax.
( Rule 4 of Export of
Services Rules,2005)
4. Exemption to services provided to a
developer of SEZ or a unit of SEZ:
Exempts the taxable
services specified in clause (105) of section 65 of the said Finance Act, which
are provided in relation to the authorized operations in a Special Economic
Zone, and received by a developer or units of a Special Economic Zone, whether
or not the said taxable services are provided inside
the Special Economic Zone, from the whole
of the service tax leviable thereon under section 66
of the said Finance Act subject to certain conditions. (
Refer notification for details)
{ Notification No. 09/2009ST dated
03.03.2009 (Prior to 03.03.2009 Notfn.No4/2004-ST dated 31.03.2004)}
5. Exemption to value of goods & material
sold by service provider:
In exercise of the powers
conferred by section 93 of the Finance Act, 1994 (32 of 1994), the Central
Government, being satisfied that it is necessary in the public interest so to
do, hereby exempts so much of the value of all the taxable services, as is
equal to the value of goods and materials sold by the service provider to the
recipient of service, from the service tax leviable
thereon under section (66) of the said Act, subject to condition that there is
documentary proof specifically indicating the value of the said goods and
materials.
(Notification No. 12/2003-ST dated 20.06.2003
effective from 01.07.2003)
6. Exemption to taxable services provided by TBI
and STEP:
All taxable services,
provided by a Technology Business Incubator (TBI) or a Science and Technology Entrepreneurship
Park (STEP) recognized by the National
Science and technology Entrepreneurship
Development Board (NSTEDB) of the Department of Science and Technology, Govt.
of India from the whole of the service
tax leviable
thereon subject tio certain conditions and
procedures. ( Refer notification for details)
(Notification
No.09/2007 ST dated 01.03.2007)
7. Exemption to taxable services provided by
entrepreneurs located within the premises of TBI or STEP:
All taxable services, provided by an entrepreneur
located within the premises of a
Technology Business Incubator (TBI) or a
Science and Technology Entrepreneurship Park (STEP) recognized by the National Science and technology Entrepreneurship Development Board (NSTEDB)
of the Department of Science and Technology, Govt. of India from the whole of the service tax leviable thereon
subject to certain conditions and
procedures. ( Refer notification for details)
(Notification
No.10/2007 ST dated 01.03.2007)
8. Exemption to services provided to Foreign
Diplomatic Missions or Consular Post in India:
All
services provided by any person, for the official use of a Foreign Diplomatic
Mission or Consular Post in India are exempted from service tax subject to
certain conditions and procedures. (Refer notification for details)
(Notification No.
33/2007-ST dated 23.05.2007)
9. Exemption to services provided for personal
use of a family member of Diplomatic Agent or Career Consular Officers posted
in Foreign Diplomatic Mission/Consular Post in India:
All services provided by any person, for
personal use of family member of Diplomatic Agents or Career Consular officers
posted in a
Foreign Diplomatic Mission or Consular
Post in India are exempted from service tax subject to certain conditions and
procedures. (Refer notification for details)
(Notification No.
34/2007-ST dated 23.05.2007)
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