DEFINATION OF SERVICE PROPOSED UNDER GST ACT, 2016

GST updates 22.01.2016

GST DAILY DOSE OF UPDATION:-

DEFINATION OF SERVICE PROPOSED UNDER GST ACT, 2016:-

Section 2(59) defines services as anything other than goods. The defination proposed is very ambiguous as it merely states that anything except goods is service. In this regard, it is pertinent to note the defination of service presently given in section 65B (44) reads as follows:-

Service means any activity carried out by a person for another for consideration, and includes a declared service, but shall not include-
(a)An activity which constitutes merely,-
(i)                Transfer of title in goods or immovable property, by way of sale, gift or in any other manner; or
(ii)              Such transfer, delivery or supply of any goods which is deemed to be sale within the meaning of clause (29A) of article 366 of the Constitution; or
(iii)            A transaction in money or actionable claim;
(b)A provision of service by an employee to the employer in the course of or in relation to his employment;
(c) Fees taken in any court or tribunal established under any law for the time being in force.

It is submitted that even on the introduction of negative list tax regime, when the scope of service tax was increased manifold, the defination of service was elaborate wherein circumstances when no service tax will be levied were specified. However, in the proposed GST regime, the defination of service has been made extensively wide. The defination simply states that anything other than goods will be considered as service which is practically very absurd as there may be activities which are not goods but cannot be considered as services too. There may be cases where 2 persons are not involved or where there is no consideration which are essential factors for an activity to be considered as service. As nothing has been mentioned regarding the essentiality of 2 persons and presence of consideration, a doubt may arise that whether everything would be leviable to GST? Moreover, even the services provided by the employee to the employer will be treated as service and would be leviable to GST which would again add to the fire of inflation that is already at its peak. Well, it may be concluded that almost everything would be taxed after implementation of GST.

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GST updates 22.01.2016

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