Service provided free of cost not taxable
Board vide circular No.62/11/2003 ST, dated 21 August 2003, clarified that as per charging
Section 66 of the Finance Act, 1994, service tax is chargeable of the value of taxable service.
Thus, if the value is zero the tax will also be zero even though the service is taxable.
Same transaction cannot be taxed twice under different services
The Central Board of Excise and Customs vide its circular No.51/13/2002 ST, dated 7 January
2003, inter alia clarified that any service (transaction) can be taxed only once, even if it appears
to fall under two or more categories. Therefore, before levying service tax it is essential to
determine under which a particular service falls. The Board decided that a service should be
categorised under that category which is more specific category and should be charged to
service tax accordingly.
There is no concept of related person in service tax
The service tax is also attracted on any service provided to any relative. If no value of service
provided is recovered from so called related person, service tax will not be chargeable.