Dear Members,
We are a section 25 company, having 80G and 12A exemptions, we have been asked by NACO to technically support and organize two workshops on given themes, and NACO had directed us to reimburse the amount with 10% organizational fee, please advise us can we charge service tax on this or we may be exempted from service tax.
Regards
Neeraj Kumar Sinha
____________________________________________________
Neeraj Kumar Sinha |Finance & Administrative Officer
H-5(Ground Floor), Green Park Extension | New Delhi, India 110016
Dear Mr Mittal
Can you please clarify if service tax is applicable on assessments that are being provided by the various organisations to the schools for assessing their students?
The latest circular states :
(i) Education:
At present, all services provided by educational institutions [providing educational services specified in the negative list] to their students, faculty and staff are exempted [section 66 D (l) of the Finance Act, 1994]; this will continue. However, in respect of services received by such educational institutions, presently, exemption is being operated through the concept of „auxiliary educational services‟ [Sl.No.9]. Doubts have been raised and clarifications have been sought regarding the scope and meaning of „auxiliary educational services‟. To bring clarity, it is proposed to omit the concept of „auxiliary educational services‟ and specify in the notification, the services which will be exempt when received by the eligible educational institutions. Accordingly, the following services received by eligible educational institutions are exempted from service tax: (i) transportation of students, faculty and staff of the eligible educational institution; (ii) catering service including any mid-day meals scheme sponsored by the Government; (iii) security or cleaning or house-keeping services in such educational institution; (iv) services relating to admission to such institution or conduct of examination. Further, for the purposes of this exemption, „educational institution‟ is being defined in the exemption notification 25/2012-ST as institutions providing educational services specified in the negative list.
It may be noted that the scope of exemption remains the same as earlier in the case of services provided by eligible educational institutions; in the case of services received by the eligible educational institutions, exemption will be available only in respect of the services specified as above.
Thanks
Dear Neeraj,
First of all let me wish you Happy Diwali. Regarding your query, I think it seems to be more of a specific query, which would be best sorted out in personal discussion with your tax consultant. However the basic principles of Service Tax are that Service Tax is applicable on all irrespective of whether entity is a For-Profit or Non-Profit, except for certain services included in exempted / Negative lists.
As far as organising an event is concerned, it is very much subject to service tax. However if total service provided is less than Rs 10 lakh in a financial year, then you need not get yourself registered. In this regard, your contract with NACO will need to be studied, if NACO is responsible for organising the conference and you will bill only for 10% representing your fees, then service tax is applicable only on 10%. However if you are responsible for entire process then service tax would be payable on the entire amount that you receive from NACO including expenses.
Therefore suggest that you please examine the issue carefully, seek expert advice and then take action.
rgds