Budget Changes for Authorised Service Station Services

Budget Changes for Authorised Service Station Services

Budget Changes for Authorised Service Station Services

Prepared By:CA Pradeep Jain andSukhvinder Kaur, LLB[FYIC]The service tax on the services provided by an Authorised Service Station was made taxable from 16.07.2001 onwards. In the start only servicing or repair of motor cars, two-wheeled and light motor vehicles by service stations or centres authorized by the manufacturers was covered under this service. From 16.06.2005 onwards reconditioning or restoration services were also covered.The definition of Authorised service station was provided in Section 65 (9) of the Finance Act, 1994 which read as under:(9) 'authorised service station' means any service station, or centre, authorised by any motor vehicle manufacturer, to carry out any service, repair, reconditioning or restoration of any motor car, maxicab or two wheeled motor vehicle manufactured by such manufacturer;Now, the Budget 2011 it is proposed to delete the said definition of Authorised service station.The effect of this deletion will be that under the service of Authorised service station instead of the select few who were authorised by the manufacturers, all the service stations including even the service stations not authorised by the manufacturers will be covered. This is welcome step and it will lead to fair competition between authorized and unauthorized service station. This will lead to number of person applying for registration in this category. This is due to the fact that there are many service stations running all over the country which are not authorized by the vehicle manufacturers.Further, the taxable service of Authorised service station has been made taxable under clause (zo) of section 65(105) of the Finance Act, 1994 as under:(zo) to any person, by an authorised service station, in relation to any service, repair, reconditioning or restoration of motor cars, light motor vehicles or two wheeled motor vehicles, in any manner;This definition of taxable service of Authorised service station is also sought to be amended by the Finance Bill, 2011 as under:"(zo) to any person, by any other person, in relation to any service for repair, reconditioning or restoration or decoration or any other similar services, of any motor vehicles other than three wheeler scooter auto-rickshaw and motor vehicle meant for goods carriage;"The scope of the said service is proposed to be widened to cover decoration or any other similar services provided for the motor vehicles. Earlier, the decoration service was not covered but now this service is covered and furthermore, any other similar services is also included. We have seen that the decoration services are provided by separate shopkeepers and they will also be covered under this net.Earlier, only the motor cars, light motor vehicles or two wheeled motor vehicles were covered. Now, the all kinds of motor vehicles except three wheeler scooter auto-rickshaw and motor vehicle meant for goods carriage i.e. the Auto rickshaw and the trucks carrying goods will be covered.As all service stations have been proposed to be covered under the scope of this service, now the name of the service should also be proposed to be changed from "Authorised Service Station service" to "Service Station service".**************http://www.articlesbase.com/taxes-articles/budget-changes-for-authorised-service-station-services-4347142.html

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