D. Murali

THERE is an Explanation that Finance Bill, 2005 introduces in the service tax law. And it reads thus:

"For the removal of doubts, it is hereby declared that where any service provided or to be provided by a person, who has established a business or has a fixed establishment from which the service is provided or to be provided, or has his permanent address or usual place of residence, in a country other than India and such service is received or to be received by a person who has his place of business, fixed establishment, permanent address or, as the case may be, usual place of residence, in India such service shall be deemed to be taxable service for the purposes of this clause."

For the removal of doubts, let me add that this `deeming' sentence can be less innocuous than it seems.

Beauty redefined

Earlier, beauty treatment meant "face and beauty treatment, cosmetic treatment, manicure, pedicure or counselling services on beauty, face care or make-up."

Having seen enough service providers and their beauty services, taxman has decided to expand his definition of beauty to include a few hairy things: "hair cutting, hair dyeing, hair dressing" at the start, and "or such other similar services" at the end.

Hair-raising, isn't it?

Zzz to zzzh

Don't try to read those `words' because they are among the new provisions brought in by the Finance Bill, 2005, to spread the tax net on more services.

Thus (zzz) is about transport of goods other than water, through pipeline or other conduit; (zzza) is about site formation and clearance; and so on till (zzzh) that speaks about construction of complex.

Too complex?

Name this service

What do you call this: The process of any recording of any programme, event or function on a magnetic tape or on any other media or device and services relating thereto such as editing, cutting, colouring, dubbing, title printing, imparting special effects, processing, adding, modifying or deleting sound, transferring from one media or device to another, or any video post-production activity, in any manner. Answer: Videotape production.

And you thought defining was easy.

Erection correction

Here's one of the troublesome phrases straight from the Finance Bill:

"Erection, commissioning or installation." It used to mean, "Any service provided by a commissioning and installation agency in relation to commissioning or installation of plant, machinery, or equipment." Now, there's a correction.

It means any service provided by a commissioning and installation agency, in relation to, erection, commissioning or installation of plant, machinery or equipment; or installation of: (a) electrical and electronic devices, including wirings or fittings therefor; or (b) plumbing, drain laying or other installations for transport of fluids; or (c) heating, ventilation or air-conditioning including related pipe work, duct work and sheet metal work; or (d) thermal insulation, sound insulation, fire proofing or water proofing; or (e) lift and escalator, fire escape staircases or travelators; or (f) such other similar services."

Digging deep

On one of the job forums, there's a complaint: "I've been out of work for six months and I am getting fed up with dredging the Net every day for positions!"

To check if the usage is right, I dredge the Bill and find the definition of dredging as "removal of material including, silt, sediments, rocks, sand, refuse, debris, plant or animal matter in any excavating, cleaning, deepening, widening or lengthening, either permanently or temporarily, of any river, port, harbour, backwater or estuary."

A glaring omission of the Net!


"When good things come, men view them all as gain; when evils come, why then should they complain?" (Kural - 379, which the FM may deploy to silence the critics of FBT and BCTT!)


(This article was published in the Business Line print edition dated March 5, 2005)
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