6.1
The word ‘indirectly’ is indicative of the fact that even indirect advice, consultancy or technical assistance in one or more disciplines of engineering is covered. There may be cases where a consulting engineer does not provide engineering services to a client directly but in the capacity of a sub-consultant, etc., to another consulting engineer who is prime consultant. In this regard, the Government vide Circular F.No. B. 43/5/97 TRU, dated 2-7-1997 has clarified that the services should be rendered to a client directly, and not in the capacity of a sub-consultant/associate consultant to another consulting engineer, who is the prime consultant. When services are rendered to the prime consultant, the levy of service tax does not fall on the sub-consultant but is on the prime or main consulting engineer who raises a bill on his client (which would include the charge for services rendered by the sub-consultant).
6.2
A service rendered indirectly will be liable to tax, if the prime contractor fails to discharge his service tax liability or is not exigible to service tax. In a work contract, the contractor, a consulting firm, may seek opinions from other consulting engineers. As the work contracts are not exigible to tax under consulting engineer service, the consulting engineer providing opinion will be liable to pay service tax.
6.3
In the case of L&T-Sargent & Lundy Ltd. v. CCE [Mumbai Bench], the appellant provided engineering services to M/s. Larsen & Toubro Limited and paid the service tax and also included the same in the bills raised on M/s. Larsen & Toubro Limited. They later realised that M/s. Larsen & Toubro Limited being consulting engineers themselves were liable to pay the service tax on the services rendered by them to the customers. On that ground, they filed a refund claim of the tax already paid. The Dy. Commissioner accepted the contention and directed refund to be paid. This order was reviewed by the jurisdictional Commissioner in terms of section 84 of the Finance Act, 1994. But the Tribunal allowed the same.
6.4
In the case of Nokia India P Ltd. Vs CCE (2006) 1 STR 233(Del), the tribunal has revealed a different dimension of the term ‘directly or indirectly’ by deciding that the expression consultant engineer encompasses direct or indirect rendering of such service including technical assistance and this includes the training of personnel, software support, operation and maintenance services, emergency support services, technical consultancy etc.
Friday, December 22, 2006
6. Services may be provided either directly or indirectly
6.1
The word ‘indirectly’ is indicative of the fact that even indirect advice, consultancy or technical assistance in one or more disciplines of engineering is covered. There may be cases where a consulting engineer does not provide engineering services to a client directly but in the capacity of a sub-consultant, etc., to another consulting engineer who is prime consultant. In this regard, the Government vide Circular F.No. B. 43/5/97 TRU, dated 2-7-1997 has clarified that the services should be rendered to a client directly, and not in the capacity of a sub-consultant/associate consultant to another consulting engineer, who is the prime consultant. When services are rendered to the prime consultant, the levy of service tax does not fall on the sub-consultant but is on the prime or main consulting engineer who raises a bill on his client (which would include the charge for services rendered by the sub-consultant).
6.2
A service rendered indirectly will be liable to tax, if the prime contractor fails to discharge his service tax liability or is not exigible to service tax. In a work contract, the contractor, a consulting firm, may seek opinions from other consulting engineers. As the work contracts are not exigible to tax under consulting engineer service, the consulting engineer providing opinion will be liable to pay service tax.
6.3
In the case of L&T-Sargent & Lundy Ltd. v. CCE [Mumbai Bench], the appellant provided engineering services to M/s. Larsen & Toubro Limited and paid the service tax and also included the same in the bills raised on M/s. Larsen & Toubro Limited. They later realised that M/s. Larsen & Toubro Limited being consulting engineers themselves were liable to pay the service tax on the services rendered by them to the customers. On that ground, they filed a refund claim of the tax already paid. The Dy. Commissioner accepted the contention and directed refund to be paid. This order was reviewed by the jurisdictional Commissioner in terms of section 84 of the Finance Act, 1994. But the Tribunal allowed the same.
6.4
In the case of Nokia India P Ltd. Vs CCE (2006) 1 STR 233(Del), the tribunal has revealed a different dimension of the term ‘directly or indirectly’ by deciding that the expression consultant engineer encompasses direct or indirect rendering of such service including technical assistance and this includes the training of personnel, software support, operation and maintenance services, emergency support services, technical consultancy etc.
The word ‘indirectly’ is indicative of the fact that even indirect advice, consultancy or technical assistance in one or more disciplines of engineering is covered. There may be cases where a consulting engineer does not provide engineering services to a client directly but in the capacity of a sub-consultant, etc., to another consulting engineer who is prime consultant. In this regard, the Government vide Circular F.No. B. 43/5/97 TRU, dated 2-7-1997 has clarified that the services should be rendered to a client directly, and not in the capacity of a sub-consultant/associate consultant to another consulting engineer, who is the prime consultant. When services are rendered to the prime consultant, the levy of service tax does not fall on the sub-consultant but is on the prime or main consulting engineer who raises a bill on his client (which would include the charge for services rendered by the sub-consultant).
6.2
A service rendered indirectly will be liable to tax, if the prime contractor fails to discharge his service tax liability or is not exigible to service tax. In a work contract, the contractor, a consulting firm, may seek opinions from other consulting engineers. As the work contracts are not exigible to tax under consulting engineer service, the consulting engineer providing opinion will be liable to pay service tax.
6.3
In the case of L&T-Sargent & Lundy Ltd. v. CCE [Mumbai Bench], the appellant provided engineering services to M/s. Larsen & Toubro Limited and paid the service tax and also included the same in the bills raised on M/s. Larsen & Toubro Limited. They later realised that M/s. Larsen & Toubro Limited being consulting engineers themselves were liable to pay the service tax on the services rendered by them to the customers. On that ground, they filed a refund claim of the tax already paid. The Dy. Commissioner accepted the contention and directed refund to be paid. This order was reviewed by the jurisdictional Commissioner in terms of section 84 of the Finance Act, 1994. But the Tribunal allowed the same.
6.4
In the case of Nokia India P Ltd. Vs CCE (2006) 1 STR 233(Del), the tribunal has revealed a different dimension of the term ‘directly or indirectly’ by deciding that the expression consultant engineer encompasses direct or indirect rendering of such service including technical assistance and this includes the training of personnel, software support, operation and maintenance services, emergency support services, technical consultancy etc.
5 Service should pertain to one or more disciplines of engineering
5.1
Engineering is the application of scientific or mathematical principles to develop economical solutions to technical problems, creating products, facilities, and structures that are useful to people. Engineers use imagination, judgment, and reasoning to apply science, technology, mathematics, and practical experience. The result is the design, production, and operation of useful objects or processes. The broad discipline of engineering encompasses a range of specialized sub-disciplines that focus on the issues associated with developing a specific kind of product, or using a specific type of technology. A comprehensive list of various disciplines of engineering is given at the end of paper.
5.2
A service provided by a consulting engineer should pertain to one or more disciplines of engineering to be exigible to service tax under the consulting engineer service. To burden a consulting engineer with service tax, it should be shown that the so called advice, consultancy or technical assistance pertains to one or more discipline of science. An advice, consultancy or technical assistance pertaining to finance, law or management given by a consulting engineer to a client is not exigible to tax under the consulting engineer service.
5.3
The scope of the services of a consultant may include any one or more of the following categories :—
(i) Feasibility report;
(ii) Pre-design services project report;
(iii) Basic design engineering;
(iv) Detailed design engineering;
(v) Procurement;
(vi) Supervision and project management;
(vii) Supervision of commissioning and initial operation;
(viii) Manpower planning and training;
(ix) Post-operation and management;
(x) Trouble shooting and technical services, including establishing systems and procedures for an existing plant.
Though the above list is not exhaustive, it reveals the wide scope and nature of the services which may be rendered by a consulting engineer.
5.4
A service provided by a consulting engineer which does not necessarily involves his expertise in one or more discipline of science is also not covered under the category of consulting engineer service. In order to be taxed under this category, it is required that that particular service can be provided by an engineer alone and no one else. If same service can be provided by a Chartered Accountant or a Cost Accountant or a Lawyer or a Management Consultant, then also it cannot be taxed under the category of Consulting Engineer Service .
Chartered Accountant, Cost Accountant, Actuary, or a person holding diploma in relation to insurance can provide services as surveyors or loss assessor . Therefore, insurance surveyor and loss assessors are not categorized as Consulting Engineer Service but under a different category i.e. ‘Insurance Auxiliary Services’
`Architecture’ and `engineering’ are two separate disciplines of technical education and these are two separate professions. Hence service of architect can not be taxed under Consulting Engineer Service. They are taxed under Architect Service’ or ‘Interior Designer Service’.
Engineering is the application of scientific or mathematical principles to develop economical solutions to technical problems, creating products, facilities, and structures that are useful to people. Engineers use imagination, judgment, and reasoning to apply science, technology, mathematics, and practical experience. The result is the design, production, and operation of useful objects or processes. The broad discipline of engineering encompasses a range of specialized sub-disciplines that focus on the issues associated with developing a specific kind of product, or using a specific type of technology. A comprehensive list of various disciplines of engineering is given at the end of paper.
5.2
A service provided by a consulting engineer should pertain to one or more disciplines of engineering to be exigible to service tax under the consulting engineer service. To burden a consulting engineer with service tax, it should be shown that the so called advice, consultancy or technical assistance pertains to one or more discipline of science. An advice, consultancy or technical assistance pertaining to finance, law or management given by a consulting engineer to a client is not exigible to tax under the consulting engineer service.
5.3
The scope of the services of a consultant may include any one or more of the following categories :—
(i) Feasibility report;
(ii) Pre-design services project report;
(iii) Basic design engineering;
(iv) Detailed design engineering;
(v) Procurement;
(vi) Supervision and project management;
(vii) Supervision of commissioning and initial operation;
(viii) Manpower planning and training;
(ix) Post-operation and management;
(x) Trouble shooting and technical services, including establishing systems and procedures for an existing plant.
Though the above list is not exhaustive, it reveals the wide scope and nature of the services which may be rendered by a consulting engineer.
5.4
A service provided by a consulting engineer which does not necessarily involves his expertise in one or more discipline of science is also not covered under the category of consulting engineer service. In order to be taxed under this category, it is required that that particular service can be provided by an engineer alone and no one else. If same service can be provided by a Chartered Accountant or a Cost Accountant or a Lawyer or a Management Consultant, then also it cannot be taxed under the category of Consulting Engineer Service .
Chartered Accountant, Cost Accountant, Actuary, or a person holding diploma in relation to insurance can provide services as surveyors or loss assessor . Therefore, insurance surveyor and loss assessors are not categorized as Consulting Engineer Service but under a different category i.e. ‘Insurance Auxiliary Services’
`Architecture’ and `engineering’ are two separate disciplines of technical education and these are two separate professions. Hence service of architect can not be taxed under Consulting Engineer Service. They are taxed under Architect Service’ or ‘Interior Designer Service’.
5. Service should pertain to one or more disciplines of engineering
5.1
Engineering is the application of scientific or mathematical principles to develop economical solutions to technical problems, creating products, facilities, and structures that are useful to people. Engineers use imagination, judgment, and reasoning to apply science, technology, mathematics, and practical experience. The result is the design, production, and operation of useful objects or processes. The broad discipline of engineering encompasses a range of specialized sub-disciplines that focus on the issues associated with developing a specific kind of product, or using a specific type of technology. A comprehensive list of various disciplines of engineering is given at the end of paper.
5.2
A service provided by a consulting engineer should pertain to one or more disciplines of engineering to be exigible to service tax under the consulting engineer service. To burden a consulting engineer with service tax, it should be shown that the so called advice, consultancy or technical assistance pertains to one or more discipline of science. An advice, consultancy or technical assistance pertaining to finance, law or management given by a consulting engineer to a client is not exigible to tax under the consulting engineer service.
5.3
The scope of the services of a consultant may include any one or more of the following categories :—
(i) Feasibility report;
(ii) Pre-design services project report;
(iii) Basic design engineering;
(iv) Detailed design engineering;
(v) Procurement;
(vi) Supervision and project management;
(vii) Supervision of commissioning and initial operation;
(viii) Manpower planning and training;
(ix) Post-operation and management;
(x) Trouble shooting and technical services, including establishing systems and procedures for an existing plant.
Though the above list is not exhaustive, it reveals the wide scope and nature of the services which may be rendered by a consulting engineer.
5.4
A service provided by a consulting engineer which does not necessarily involves his expertise in one or more discipline of science is also not covered under the category of consulting engineer service. In order to be taxed under this category, it is required that that particular service can be provided by an engineer alone and no one else. If same service can be provided by a Chartered Accountant or a Cost Accountant or a Lawyer or a Management Consultant, then also it cannot be taxed under the category of Consulting Engineer Service .
Chartered Accountant, Cost Accountant, Actuary, or a person holding diploma in relation to insurance can provide services as surveyors or loss assessor . Therefore, insurance surveyor and loss assessors are not categorized as Consulting Engineer Service but under a different category i.e. ‘Insurance Auxiliary Services’
`Architecture’ and `engineering’ are two separate disciplines of technical education and these are two separate professions. Hence service of architect can not be taxed under Consulting Engineer Service. They are taxed under Architect Service’ or ‘Interior Designer Service’.
Engineering is the application of scientific or mathematical principles to develop economical solutions to technical problems, creating products, facilities, and structures that are useful to people. Engineers use imagination, judgment, and reasoning to apply science, technology, mathematics, and practical experience. The result is the design, production, and operation of useful objects or processes. The broad discipline of engineering encompasses a range of specialized sub-disciplines that focus on the issues associated with developing a specific kind of product, or using a specific type of technology. A comprehensive list of various disciplines of engineering is given at the end of paper.
5.2
A service provided by a consulting engineer should pertain to one or more disciplines of engineering to be exigible to service tax under the consulting engineer service. To burden a consulting engineer with service tax, it should be shown that the so called advice, consultancy or technical assistance pertains to one or more discipline of science. An advice, consultancy or technical assistance pertaining to finance, law or management given by a consulting engineer to a client is not exigible to tax under the consulting engineer service.
5.3
The scope of the services of a consultant may include any one or more of the following categories :—
(i) Feasibility report;
(ii) Pre-design services project report;
(iii) Basic design engineering;
(iv) Detailed design engineering;
(v) Procurement;
(vi) Supervision and project management;
(vii) Supervision of commissioning and initial operation;
(viii) Manpower planning and training;
(ix) Post-operation and management;
(x) Trouble shooting and technical services, including establishing systems and procedures for an existing plant.
Though the above list is not exhaustive, it reveals the wide scope and nature of the services which may be rendered by a consulting engineer.
5.4
A service provided by a consulting engineer which does not necessarily involves his expertise in one or more discipline of science is also not covered under the category of consulting engineer service. In order to be taxed under this category, it is required that that particular service can be provided by an engineer alone and no one else. If same service can be provided by a Chartered Accountant or a Cost Accountant or a Lawyer or a Management Consultant, then also it cannot be taxed under the category of Consulting Engineer Service .
Chartered Accountant, Cost Accountant, Actuary, or a person holding diploma in relation to insurance can provide services as surveyors or loss assessor . Therefore, insurance surveyor and loss assessors are not categorized as Consulting Engineer Service but under a different category i.e. ‘Insurance Auxiliary Services’
`Architecture’ and `engineering’ are two separate disciplines of technical education and these are two separate professions. Hence service of architect can not be taxed under Consulting Engineer Service. They are taxed under Architect Service’ or ‘Interior Designer Service’.
5 Service should pertain to one or more disciplines of engineering
5.1
Engineering is the application of scientific or mathematical principles to develop economical solutions to technical problems, creating products, facilities, and structures that are useful to people. Engineers use imagination, judgment, and reasoning to apply science, technology, mathematics, and practical experience. The result is the design, production, and operation of useful objects or processes. The broad discipline of engineering encompasses a range of specialized sub-disciplines that focus on the issues associated with developing a specific kind of product, or using a specific type of technology. A comprehensive list of various disciplines of engineering is given at the end of paper.
5.2
A service provided by a consulting engineer should pertain to one or more disciplines of engineering to be exigible to service tax under the consulting engineer service. To burden a consulting engineer with service tax, it should be shown that the so called advice, consultancy or technical assistance pertains to one or more discipline of science. An advice, consultancy or technical assistance pertaining to finance, law or management given by a consulting engineer to a client is not exigible to tax under the consulting engineer service.
5.3
The scope of the services of a consultant may include any one or more of the following categories :—
(i) Feasibility report;
(ii) Pre-design services project report;
(iii) Basic design engineering;
(iv) Detailed design engineering;
(v) Procurement;
(vi) Supervision and project management;
(vii) Supervision of commissioning and initial operation;
(viii) Manpower planning and training;
(ix) Post-operation and management;
(x) Trouble shooting and technical services, including establishing systems and procedures for an existing plant.
Though the above list is not exhaustive, it reveals the wide scope and nature of the services which may be rendered by a consulting engineer.
5.4
A service provided by a consulting engineer which does not necessarily involves his expertise in one or more discipline of science is also not covered under the category of consulting engineer service. In order to be taxed under this category, it is required that that particular service can be provided by an engineer alone and no one else. If same service can be provided by a Chartered Accountant or a Cost Accountant or a Lawyer or a Management Consultant, then also it cannot be taxed under the category of Consulting Engineer Service .
Chartered Accountant, Cost Accountant, Actuary, or a person holding diploma in relation to insurance can provide services as surveyors or loss assessor . Therefore, insurance surveyor and loss assessors are not categorized as Consulting Engineer Service but under a different category i.e. ‘Insurance Auxiliary Services’
`Architecture’ and `engineering’ are two separate disciplines of technical education and these are two separate professions. Hence service of architect can not be taxed under Consulting Engineer Service. They are taxed under Architect Service’ or ‘Interior Designer Service’.
Engineering is the application of scientific or mathematical principles to develop economical solutions to technical problems, creating products, facilities, and structures that are useful to people. Engineers use imagination, judgment, and reasoning to apply science, technology, mathematics, and practical experience. The result is the design, production, and operation of useful objects or processes. The broad discipline of engineering encompasses a range of specialized sub-disciplines that focus on the issues associated with developing a specific kind of product, or using a specific type of technology. A comprehensive list of various disciplines of engineering is given at the end of paper.
5.2
A service provided by a consulting engineer should pertain to one or more disciplines of engineering to be exigible to service tax under the consulting engineer service. To burden a consulting engineer with service tax, it should be shown that the so called advice, consultancy or technical assistance pertains to one or more discipline of science. An advice, consultancy or technical assistance pertaining to finance, law or management given by a consulting engineer to a client is not exigible to tax under the consulting engineer service.
5.3
The scope of the services of a consultant may include any one or more of the following categories :—
(i) Feasibility report;
(ii) Pre-design services project report;
(iii) Basic design engineering;
(iv) Detailed design engineering;
(v) Procurement;
(vi) Supervision and project management;
(vii) Supervision of commissioning and initial operation;
(viii) Manpower planning and training;
(ix) Post-operation and management;
(x) Trouble shooting and technical services, including establishing systems and procedures for an existing plant.
Though the above list is not exhaustive, it reveals the wide scope and nature of the services which may be rendered by a consulting engineer.
5.4
A service provided by a consulting engineer which does not necessarily involves his expertise in one or more discipline of science is also not covered under the category of consulting engineer service. In order to be taxed under this category, it is required that that particular service can be provided by an engineer alone and no one else. If same service can be provided by a Chartered Accountant or a Cost Accountant or a Lawyer or a Management Consultant, then also it cannot be taxed under the category of Consulting Engineer Service .
Chartered Accountant, Cost Accountant, Actuary, or a person holding diploma in relation to insurance can provide services as surveyors or loss assessor . Therefore, insurance surveyor and loss assessors are not categorized as Consulting Engineer Service but under a different category i.e. ‘Insurance Auxiliary Services’
`Architecture’ and `engineering’ are two separate disciplines of technical education and these are two separate professions. Hence service of architect can not be taxed under Consulting Engineer Service. They are taxed under Architect Service’ or ‘Interior Designer Service’.
5. Service should pertain to one or more disciplines of engineering
5.1
Engineering is the application of scientific or mathematical principles to develop economical solutions to technical problems, creating products, facilities, and structures that are useful to people. Engineers use imagination, judgment, and reasoning to apply science, technology, mathematics, and practical experience. The result is the design, production, and operation of useful objects or processes. The broad discipline of engineering encompasses a range of specialized sub-disciplines that focus on the issues associated with developing a specific kind of product, or using a specific type of technology. A comprehensive list of various disciplines of engineering is given at the end of paper.
5.2
A service provided by a consulting engineer should pertain to one or more disciplines of engineering to be exigible to service tax under the consulting engineer service. To burden a consulting engineer with service tax, it should be shown that the so called advice, consultancy or technical assistance pertains to one or more discipline of science. An advice, consultancy or technical assistance pertaining to finance, law or management given by a consulting engineer to a client is not exigible to tax under the consulting engineer service.
5.3
The scope of the services of a consultant may include any one or more of the following categories :—
(i) Feasibility report;
(ii) Pre-design services project report;
(iii) Basic design engineering;
(iv) Detailed design engineering;
(v) Procurement;
(vi) Supervision and project management;
(vii) Supervision of commissioning and initial operation;
(viii) Manpower planning and training;
(ix) Post-operation and management;
(x) Trouble shooting and technical services, including establishing systems and procedures for an existing plant.
Though the above list is not exhaustive, it reveals the wide scope and nature of the services which may be rendered by a consulting engineer.
5.4
A service provided by a consulting engineer which does not necessarily involves his expertise in one or more discipline of science is also not covered under the category of consulting engineer service. In order to be taxed under this category, it is required that that particular service can be provided by an engineer alone and no one else. If same service can be provided by a Chartered Accountant or a Cost Accountant or a Lawyer or a Management Consultant, then also it cannot be taxed under the category of Consulting Engineer Service .
Chartered Accountant, Cost Accountant, Actuary, or a person holding diploma in relation to insurance can provide services as surveyors or loss assessor . Therefore, insurance surveyor and loss assessors are not categorized as Consulting Engineer Service but under a different category i.e. ‘Insurance Auxiliary Services’
`Architecture’ and `engineering’ are two separate disciplines of technical education and these are two separate professions. Hence service of architect can not be taxed under Consulting Engineer Service. They are taxed under Architect Service’ or ‘Interior Designer Service’.
Engineering is the application of scientific or mathematical principles to develop economical solutions to technical problems, creating products, facilities, and structures that are useful to people. Engineers use imagination, judgment, and reasoning to apply science, technology, mathematics, and practical experience. The result is the design, production, and operation of useful objects or processes. The broad discipline of engineering encompasses a range of specialized sub-disciplines that focus on the issues associated with developing a specific kind of product, or using a specific type of technology. A comprehensive list of various disciplines of engineering is given at the end of paper.
5.2
A service provided by a consulting engineer should pertain to one or more disciplines of engineering to be exigible to service tax under the consulting engineer service. To burden a consulting engineer with service tax, it should be shown that the so called advice, consultancy or technical assistance pertains to one or more discipline of science. An advice, consultancy or technical assistance pertaining to finance, law or management given by a consulting engineer to a client is not exigible to tax under the consulting engineer service.
5.3
The scope of the services of a consultant may include any one or more of the following categories :—
(i) Feasibility report;
(ii) Pre-design services project report;
(iii) Basic design engineering;
(iv) Detailed design engineering;
(v) Procurement;
(vi) Supervision and project management;
(vii) Supervision of commissioning and initial operation;
(viii) Manpower planning and training;
(ix) Post-operation and management;
(x) Trouble shooting and technical services, including establishing systems and procedures for an existing plant.
Though the above list is not exhaustive, it reveals the wide scope and nature of the services which may be rendered by a consulting engineer.
5.4
A service provided by a consulting engineer which does not necessarily involves his expertise in one or more discipline of science is also not covered under the category of consulting engineer service. In order to be taxed under this category, it is required that that particular service can be provided by an engineer alone and no one else. If same service can be provided by a Chartered Accountant or a Cost Accountant or a Lawyer or a Management Consultant, then also it cannot be taxed under the category of Consulting Engineer Service .
Chartered Accountant, Cost Accountant, Actuary, or a person holding diploma in relation to insurance can provide services as surveyors or loss assessor . Therefore, insurance surveyor and loss assessors are not categorized as Consulting Engineer Service but under a different category i.e. ‘Insurance Auxiliary Services’
`Architecture’ and `engineering’ are two separate disciplines of technical education and these are two separate professions. Hence service of architect can not be taxed under Consulting Engineer Service. They are taxed under Architect Service’ or ‘Interior Designer Service’.
4. Service must be in relation to advice, consultancy or technical assistance in any manner
To understand the scope of the service the terms ‘advice’, ‘consultancy’ and ‘technical assistance’ need to be analysed
4.1
‘Advice’
In terms of Oxford Dictionary, advice means guidance or recommendations offered with regard to future action, 2 a formal notice of a sale or other transaction.
In terms of Black’s dictionary, advice means a guidance offered by one person to another, esp. a lawyer, to another.
In terms of Law Lexicon by Ramanatha Aiyar, advice means counsel given or an opinion expressed as to the wisdom of future conduct.
In terms of Cambridge dictionary, advice means an opinion which someone offers you about what you should do or how you should act in a particular situation
In view of the above definition, it can be said that advice means a communication to a client in the form of a guidance, recommendation, opinion or counsel. An advice is optional in nature. It is upto the client to accept the advice or not.
4.2
‘Consultancy’
In terms of Oxford Dictionary, consultancy means a professional practice giving expert advice in a particular field.
In terms of Black’s Law dictionary, consultation means the act of asking the advice or opinion of someone (such as a lawyer).
In terms of Cambridge dictionary, consultancy means to give specialist advice on a particular subject.
In terms of Law Lexicon, by Ramanatha Aiyar, consultant is an expression apparently meaning that the person consulted is to give to the company the benefit of his knowledge and experience.
In terms of Wikipedia, a consultant is professional who provides expert advice in a particular area of expertise such as accountancy, the environment, technology, the law, human resources, marketing, medicine, finance, public affairs, communication, engineering or waste management.
The main difference between a consultant and a 'normal' expert is that the consultant is not himself employed with his client, but instead is in business for himself or for a consultancy firm, usually with multiple and changing clients. Thus, his clients have access to deeper levels of expertise than would be feasible for them to retain in-house, especially if the speciality is needed comparatively rarely.
4.3
‘Technical assistance’
In terms of Oxford Dictionary and Cambridge dictionary, assistance means help or support.
An assistance is normally for the purpose of achieving a particular aim or result.
Therefore, technical assistance means a help or support given to a client which is technical in nature. Technical help is intangible involving technical expertise of the service provider with an intent to solve a problem.
4.4
In view of the above definitions of advice, consultancy and technical assistance, it transpires that, these are intangibles, which are expressed orally or in writing by the consulting engineer by applying the knowledge of science which has been acquired by him in the course of education imparted by a recognized university and practice in the field of engineering. Further, advice, consultancy and technical assistance are to provide solutions to problems, which benefit the client by increasing his efficiency and productivity.
4.5
If a consulting engineer undertakes a contract of work of erection and commissioning of a project/plant, it can not be considered as a mere advice, consultancy or technical assistance given to the client. Even though, consulting engineer has to use his engineering expertise, he uses that expertise to perform the task, and therefore, such work contract is beyond the ambit of taxable service . Further, a work contract cannot be vivisected and a part of it subjected to tax. Central Board of Excise and Customs (‘the Board’ or ‘CBEC’) has also clarified that charges for erection, installation and commissioning are not covered under the category of consulting engineer services . These are taxed under ‘Erection, Commissioning or Installation Service.
On the other hand, if the erection and commissioning work is done by a third party and consulting engineer is required to supervise the work independently and provide solution to the various problems, he will fall within the ambit of taxable service.
4.6
Royalty payment for use of technology and know-how is neither an advice nor a consultancy or technical assistance to a client. It is understood as a share of product or profit reserved by owner for permitting another the use of his property. Royalty payments are in the nature of license fees for the use of the intellectual property right and could not be treated as value of services under consulting engineering service; therefore these payments are not exigible to service tax under the category of consulting engineer service. These are taxed under “Intellectual Property Services”.
4.7
Certification and Testing vis-à-vis advice, consultancy and assistance
Certificate is an official document recording a particular fact, event, or level of achievement. It is a mere evaluation of the present working without any suggestion as to what manner problems can be solved. Therefore, certification work is not within the ambit of service tax under consulting engineer service. Board has clarified that certificates given under authority of any statute/international protocol/code/convention cannot be considered to be a consultancy job. Since advice is generally understood to be optional in nature and has no statutory force. It is up to the client to accept the advice or not. The activity of certification will, therefore, not fall under the category of advice. With regard to ‘technical assistance’, a certificate given is not of any ‘assistance’ to the person using the certificate. Hence, the survey/inspection done in pursuance thereof for the purpose under an authority of law, will also not amount to consultancy advice or technical assistance . These are taxed under ‘Technical Inspection and Certification Service’.
4.8
Similarly, testing of goods is also a mere evaluation of present strength and weakness of the product, therefore, falls outside the ambit of service tax under consulting engineer service . These are taxed under ‘Technical Testing and Analysis Service’.
4.1
‘Advice’
In terms of Oxford Dictionary, advice means guidance or recommendations offered with regard to future action, 2 a formal notice of a sale or other transaction.
In terms of Black’s dictionary, advice means a guidance offered by one person to another, esp. a lawyer, to another.
In terms of Law Lexicon by Ramanatha Aiyar, advice means counsel given or an opinion expressed as to the wisdom of future conduct.
In terms of Cambridge dictionary, advice means an opinion which someone offers you about what you should do or how you should act in a particular situation
In view of the above definition, it can be said that advice means a communication to a client in the form of a guidance, recommendation, opinion or counsel. An advice is optional in nature. It is upto the client to accept the advice or not.
4.2
‘Consultancy’
In terms of Oxford Dictionary, consultancy means a professional practice giving expert advice in a particular field.
In terms of Black’s Law dictionary, consultation means the act of asking the advice or opinion of someone (such as a lawyer).
In terms of Cambridge dictionary, consultancy means to give specialist advice on a particular subject.
In terms of Law Lexicon, by Ramanatha Aiyar, consultant is an expression apparently meaning that the person consulted is to give to the company the benefit of his knowledge and experience.
In terms of Wikipedia, a consultant is professional who provides expert advice in a particular area of expertise such as accountancy, the environment, technology, the law, human resources, marketing, medicine, finance, public affairs, communication, engineering or waste management.
The main difference between a consultant and a 'normal' expert is that the consultant is not himself employed with his client, but instead is in business for himself or for a consultancy firm, usually with multiple and changing clients. Thus, his clients have access to deeper levels of expertise than would be feasible for them to retain in-house, especially if the speciality is needed comparatively rarely.
4.3
‘Technical assistance’
In terms of Oxford Dictionary and Cambridge dictionary, assistance means help or support.
An assistance is normally for the purpose of achieving a particular aim or result.
Therefore, technical assistance means a help or support given to a client which is technical in nature. Technical help is intangible involving technical expertise of the service provider with an intent to solve a problem.
4.4
In view of the above definitions of advice, consultancy and technical assistance, it transpires that, these are intangibles, which are expressed orally or in writing by the consulting engineer by applying the knowledge of science which has been acquired by him in the course of education imparted by a recognized university and practice in the field of engineering. Further, advice, consultancy and technical assistance are to provide solutions to problems, which benefit the client by increasing his efficiency and productivity.
4.5
If a consulting engineer undertakes a contract of work of erection and commissioning of a project/plant, it can not be considered as a mere advice, consultancy or technical assistance given to the client. Even though, consulting engineer has to use his engineering expertise, he uses that expertise to perform the task, and therefore, such work contract is beyond the ambit of taxable service . Further, a work contract cannot be vivisected and a part of it subjected to tax. Central Board of Excise and Customs (‘the Board’ or ‘CBEC’) has also clarified that charges for erection, installation and commissioning are not covered under the category of consulting engineer services . These are taxed under ‘Erection, Commissioning or Installation Service.
On the other hand, if the erection and commissioning work is done by a third party and consulting engineer is required to supervise the work independently and provide solution to the various problems, he will fall within the ambit of taxable service.
4.6
Royalty payment for use of technology and know-how is neither an advice nor a consultancy or technical assistance to a client. It is understood as a share of product or profit reserved by owner for permitting another the use of his property. Royalty payments are in the nature of license fees for the use of the intellectual property right and could not be treated as value of services under consulting engineering service; therefore these payments are not exigible to service tax under the category of consulting engineer service. These are taxed under “Intellectual Property Services”.
4.7
Certification and Testing vis-à-vis advice, consultancy and assistance
Certificate is an official document recording a particular fact, event, or level of achievement. It is a mere evaluation of the present working without any suggestion as to what manner problems can be solved. Therefore, certification work is not within the ambit of service tax under consulting engineer service. Board has clarified that certificates given under authority of any statute/international protocol/code/convention cannot be considered to be a consultancy job. Since advice is generally understood to be optional in nature and has no statutory force. It is up to the client to accept the advice or not. The activity of certification will, therefore, not fall under the category of advice. With regard to ‘technical assistance’, a certificate given is not of any ‘assistance’ to the person using the certificate. Hence, the survey/inspection done in pursuance thereof for the purpose under an authority of law, will also not amount to consultancy advice or technical assistance . These are taxed under ‘Technical Inspection and Certification Service’.
4.8
Similarly, testing of goods is also a mere evaluation of present strength and weakness of the product, therefore, falls outside the ambit of service tax under consulting engineer service . These are taxed under ‘Technical Testing and Analysis Service’.
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