Business Daily from THE HINDU group of publications
Monday, Jun 11, 2007
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Business Daily from THE HINDU group of publications Monday, Jun 11, 2007 ePaper |
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Mentor
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Taxation Industry & Economy - Mining & Quarrying Columns - At Your Service Digging up tax Sanjiv AgarwalSanjiv Agarwal
What is the scope of `mining services' introduced by the Finance Act, 2007? Does it include actual mining activity? Rajesh Kumar The Finance Act, 2007 imposes service tax on mining services, that is, services outsourced for mining of minerals, oil or gas. These would be separate taxable services from the a date to be notified. The gross amount charged by or the gross consideration received by any service provider in relation to mining services of minerals, oil or gas shall be chargeable to service tax. Taxable service has been defined in Section 65(105)(zzzy) as: "Taxable service means any service provided or to be provided to any person, by any other person in relation to mining of mineral, oil or gas." By this definition, what taxable is the services of mining in relation to mineral, oil or gas. This would mean that mining of items or articles or goods other than mineral, oil or gas would not be subject to levy of service tax. The essential conditions for being a taxable services in relation to mining of mineral, oil or gas are: Service should be provided or to be provided by any person to any other person. Service should be of mining or in relation thereto. Service of mining should be of mineral, oil or gas (and nothing else). Service will include exploitation of mineral, oil or gas (post exploration activities). The subject matter of mining must relate to any of the following items: Mineral, oil and gas.
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