Safety rider to disabled posts

New Delhi, July 11: A person can be denied promotion if he has a disability that makes him unfit to carry out his job in a higher post or poses a safety risk, the Supreme Court has ruled.

The court, however, made it clear that a disability in itself cannot bar a person from promotion, as laid down by the disabilities act of 1995.

However, the court added that the act was not intended to jeopardise the safety of the public, the disabled employee himself or his co-employees, or the safety of the employers’ equipment or assets. Nor was the law aimed at accepting reduced standards of safety and efficiency merely because an employee suffered from a disability.

“If promotion is denied on the ground it will affect safety, security and performance, then it is not denial of promotion merely on the ground of disability but is denial by reason of the disability plus something more, i.e. (an) adverse effect upon (the) employee’s performance of (the) higher duties or functions attached to the promotional post,” a two-judge bench said on Thursday.

The court was ruling on a railway ministry appeal against a high court decision asking it to promote a colour-blind person to a higher grade.

Devender Kumar Pant was appointed lab assistant in the Research Designs and Standards Organisation (RDSO) in 1972. He was promoted to junior research assistant in 1977 and senior research assistant in 1983.

In 1997, the ministry promoted him to chief research assistant on condition he get a medical certificate stating he was not colour blind. Pant moved the Lucknow bench of the Central Administrative Tribunal, asking it to quash the part of the order requiring him to produce the certificate, and other orders asking him to appear before medical officers.

The tribunal dismissed his case in May 2005, ruling that the ministry order was in keeping with job requirements and was in his own interest and that of other employees. It held that unless Pant obtained the fitness certificate, he would not be meeting the medical standards for the post.

Allahabad High Court, however, upheld Pant’s appeal, ruling that promotion could not be denied merely on the ground of disability unless the employer was exempted from certain provisions of the 1995 act by a notification. No such notification exempted the RDSO.

The Supreme Court, upholding the ministry appeal, also noted that the law often treated people with different disabilities differently.

For example, a provision of the act reserves jobs for people with blindness, low vision, hearing impairment, locomotor disability or cerebral palsy, but not for those with mental retardation or illness.

The court also said that colour blindness could not be construed as a disability under the 1995 Act, since it did not amount to blindness or low vision. So, it was doubtful whether a colour-blind person could claim benefits under the act.

Courtesy: The Telegraph

Withdrawal/witholding/recovery of pension/gratuity in the case of minor penalty proceedings.

Subject: Levy of service tax on educational institutions- regarding

Circular No. 107/01/2009 – ST

F.No137/23/2007-CX.4

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

***

New Delhi, dated 28^th January 2009

Subject: Levy of service tax on educational institutions- regarding

****************

Various educational institutions impart training and conduct courses in different fields. Many of these institutions issue certificates/degrees/diplomas to the candidates upon their successfully completing such courses. Apart from government run or aided institutes imparting education, training or coaching, there are several private run institutes or centers, which impart education/ training/ coaching, teach skills, help in preparing for competitive examinations or run classes on various subjects. Service tax is leviable on services provided by ‘commercial training and coaching centers’, since the year 2003. Over a period of time, certain doubts /disputes have arisen in the field in respect of the chargeability of service tax on the fees/ charges collected by such institutes and education centers. Some of such issues have been discussed below.

2. COMMERCIAL NATURE OF INSTITUTE

The first issue arises from the very name i.e. Commercial training or coaching center’. Many service providers argue that the word ‘commercial’ appearing in the aforementioned phrase, suggests that to fall under this definition, the establishment or the institute must be commercial (i.e. having profit motive) in nature. It is argued that institutes which are run by charitable trusts or on no-profit basis would not fall within the phrase commercial training or coaching center and none of their activities would fall under the taxable service. This argument is clearly erroneous. As the phrase ‘commercial training or coaching center ‘has been defined in a statute, there is no scope to add or delete words while interpreting the same. The definition commercial training or coaching center has no mention that such institute must have ‘commercial’ (i.e. profit making) intent or motive. Therefore, there is no reason to give a restricted meaning to the phrase. Secondly, service tax, unlike direct taxes, is chargeable on the gross amount received towards the service charges, irrespective of whether the venture is ‘profit making, loss making or charity oriented’ in its motive or its outcome. The word “Commercial” used in the phrase is with reference to the activity of training or coaching and not to the nature or activity of the institute providing the training or coaching. Thus, services provided by all institutes or establishments, which fulfills the requirements of definition, are leviable to service tax.

3. POST SCHOOL EDUCATION

3.1 Determination of taxability of education, other than school education is more complex and poses more questions. This is because, it covers an entire gamut of educational courses, such as formal higher education (i.e. bachelors, masters, doctoral, post doctoral course), specialized education, vocational education, language (including foreign language) courses etc. These vary in terms of their content; purpose; scope; and the type of institutes or establishments, which impart them.

3.2 The system of statutory recognition of educational establishments or institutions in India is still in the state of evolution. As regards university education, University Grants Commission (UGC) is the apex regulating body. As per the objects of the University Grants Commission Act, 1956 (which established UGC) the said Act is ‘to make provision for the co-ordination and determination of standards in Universities and for that purpose, to establish a University Grants Commission’.

·

As per the definition, in terms of Section 2(f) of the Act, a University means a University established or incorporated by or under a Central Act, a Provincial Act or a State Act, and includes any such institution as may, in consultation with the University concerned, be recognized by the Commission in accordance with the regulations made in this behalf under this Act. . Therefore, all universities which are a creature of a State or Union Act fall within this definition of ‘University’.

· Further, Section 3 of the Act, explains the scope of a ‘deemed university’ and defines that the Central Government may, on the advice of the Commission, declare by notification in the Official Gazette, that any institution for higher education, other than a University, shall be deemed to be a University for the purposes of this Act, and on such a declaration being made, all the provisions of this Act shall apply to such institution as if it were a University within the meaning of clause (f) of section 2.

· Also, UGC, with the approval of Central Government and under the Recognition of College in Terms of Regulations, 1974 framed under the UGC Act, can grant recognition to a college or institution run by a trust, a registered society or a body corporate or body incorporated under Central or state Act as an institution affiliated to or form as constituent member with a university, providing education up to a bachelors degree, masters degree or diploma of a duration of minimum one academic year

· As per National Policy on Education, 1986, a scheme of autonomous colleges was promoted. In the autonomous colleges, whereas the degree continues to be awarded by the university, the name of college is also included. These colleges develop and submit new courses of study for approval by the university. These autonomous colleges are fully responsible for the conduct of examination.

As all these institutions or establishment are either created or recognized in terms of the power conferred by statutes, they would fall in the category of institutes/ establishments which issues diploma or certificate recognized by the law for the time being in force. As regards issuance of degree, section 22(1) of the said Act, provides for right of conferring or granting degrees only by a ‘university’ (as defined above) or a ‘deemed university’ (as defined above).

3.3 In addition, for recognition of professional courses, promotion of professional institutions and providing grants to various programmes, a number of ‘professional councils (Such as All India Council for Technical Education-AICTE, Medical Council of India-MCI, Indian Council for Agricultural Research-ICAR, Bar Council of India-BCI) have been created through independent Union Acts. Since, inter alia these councils are entrusted with ensuring norms and standards of the courses, physical and instructional facilities, undertaking assessment etc., they have also been provided with powers to make subordinate legislations (i.e. through notifications, circulars, rules) that the institutions or the establishments within their ambit must abide. In case of default, the councils have the power to derecognize an institution or establishment or a particular course being conducted by them, even if they are recognized as a university, a deemed university or an affiliated college. If an institution or establishment is derecognized, then such institution or establishment cannot be called to be an institute or establishment which issues any certificate or diploma or degree or any educational qualification recognized by the law for the time being in force. With the result, the courses conducted would fall under the ambit of ‘commercial training or coaching centers’ and would be charged to tax. It may however, be noted that for exercising such power, there should be a valid rule / notification / circular, prescribing the minimum requirements or standards as also the consequences of default.

3.4 All India Council for Technical Education-AICTE, was started in 1945 with the objectives stated above. Based on the recommendations of a ‘National Working Group’ (constituted by the Government of India) that AICTE be vested with the necessary statutory authority, it was given legislative support through an Act, called the AICTE Act, 1987. AICTE, using the powers conferred on it through 1987 Act, issued the ‘AICTE (Grant of Approval for Starting New Technical Institutions, Introduction of Courses or Programme and Approval), Regulation 1994. Theses were amended in the years 1997 and 2000. Under Regulation 4 (Requirement of Grant of approval) of these Regulations, AICTE prescribed that,-

“After the commencement of these regulations,-

a. No new Technical Institution or University Technical Department shall be started; or

b. No course or programme shall be introduced by any Technical Institution, University including a Deemed University or University Department or Collage; or

c. No Technical Institution, University or Deemed University or University Department or College shall continue to admit students for Degree or Diploma course; or

d. No approved intake capacity of seats shall be increased or varied;

Except with the approval of the council.

The powers to issue regulations for approval are conferred on AICTE under Section 23 read with Section 10 of the AICTE Act.

3.5 In 2003, when service tax was first imposed on commercial training and coaching centers, the AICTE regulations required that for (a) starting or establishing new technical institutions; (b) introduction of additional programmes; or (c) increase in ‘intake’ in the existing programmes of AICTE approved institutions, a ‘no objection certificate’ from the concerned State government /UT would be required (notification F.37-3/Legal (iii)/2002 dated 10.09.2003). This notification does not prescribe any certification for existing institutes or establishments, which did not introduce any additional programme or did not increase in ‘intake’ in an existing programme. Thus, at that stage, not having a AICTE approval for such existing institution or establishment did not make them ineligible for being an institute or establishment which issues any certificate or diploma or degree or any educational qualification recognized by the law for the time being in force. Thus, if otherwise recognized or accepted, this sole reason of absence of AICTE approval did not cause such institutions or establishments to be within the service tax net. On 6.01.2005, vide notification No. F.37-3/Legal/2004, the previous AICTE Regulations was replaced by new Regulations. These Regulations expanded the scope and stated (Regulation No. 5) that no new technical institution of the Government, Government Aided or Private institution shall be introduced; no new courses or programs in technical education shall be introduced or no variation of intake shall be effected or no existing technical institution of the Government, Government Aided or Private institution shall conduct any technical course without prior approval of the council. The Regulation No. 7 of these Regulations also stated that the council shall, in every year publish the names of approved technical institutions, conducting course in technical education, the course and programs approved by the council and the number of seats permitted for each course etc. These Regulations were again superseded by another set of Regulations issued vide Not. No. F-37-3/Legal/2004 dated 28.11.2005, where the requirement of grant of approval by AICTE was further elaborated to specifically include universities, deemed universities and any admission authority etc. Vide notification No. F-2-1/2006 U.3 (A) dated 5.04.2006 the Central Government issued clarification regarding the role and the powers of AICTE and UGC with respect to ‘Deemed to be University’. From the above it emerges that from the year 2005 onwards, a technical institution or establishment (which is otherwise recognized being a university, or affiliate college) not having AICTE approval cannot be called to be the one issuing any certificate or diploma or degree or any educational qualification recognized by the law for the time being in force and thus be within the ambit of service tax. However ‘Deemed to be University’ have been exempt from this requirement. As per the said notification for the institutes ‘Deemed to be University’, it is not a pre-requisite to obtain the approval of AICTE to start any programme in technical or management education leading to an award, including degrees in disciplines covered under the AICTE Act, 1987. However, such institutes are required to ensure the maintenance of the minimum standards prescribed by the AICTE for various courses under the jurisdiction of the said council.

3.6 Similar would be the situation in case of other Statutory Councils.

3.7 A related issue is, that since the concept of recognition of an educational qualification in India has been dynamic in nature (i.e. the degree/ diploma/ certificate an institute or establishment may be recognized by the law at one time and not recognized at other, due to change in legal provisions) the taxability of the courses conducted would depend on the legal status of such institute or establishment at the point of time when such service is provided (i.e. course is conducted). It cannot be said that once recognized an institute or establishment would remain so even in future or was so in the past.

3.8 Many a time private institutes conduct courses and issue diplomas or certificates in collaboration with certain foreign institutes universities. In many cases private enterprises conduct campus interviews of the students of such institutes and offer them jobs. Such certificates / diplomas may be accepted for higher education abroad. However, such a certificate / diploma cannot be called as the one ‘recognized by the law for the time being in force’ unless such a diploma/ certificate has been specifically recognized by the statutory authorities such as UGC, AICTE. Consequently, such institutes would not fall under the exempted category and would be subjected to tax.

4. VOCATIONAL TRAINING INSTITUTE

The vocational training institutes are exempted from service tax vide notification no. 24/2004-ST, dated 10.09.2004 (as amended). By definition, such institutes should provide training or coaching that imparts skill to enable the trainee to seek employment or undertake self-employment, directly after such training or coaching. Disputes have arisen in respect of institutes that offer general course on improving communication skills, personality development, how to be effective in group discussions or personal interviews, general grooming and finishing etc. It is claimed that such training or coaching improves the job prospects of a candidate and therefore they are eligible for exemption as ‘vocational training institutes. However, a careful reading of the definition shows that the exemption is available only to such institutes that impart training to enable the trainee to seek employment or self-employment. The courses referred to above do not satisfy this condition because on their own such courses do not prepare a candidate to take up employment or self-employment directly after such training or coaching. They only improve the chances of success for a candidate who already has the required skill. Therefore, such institutes are not covered under the exemption.

5. CONCLUSION

All pending cases may be disposed of accordingly. In case any difficulty is faced in implementing these instructions, the same may be brought to the notice of the undersigned.

(Gautam Bhattacharya)

Commissioner (Service Tax)

CBEC, New Delhi

Service Tax

Service tax is a tax levied on services rendered by a person and the responsibility of payment of the tax is cast on the service provider. It is an indirect tax as it can be recovered from the service receiver by the service provider in course of his business transactions. Service Tax was introduced in India in 1994 by Chapter V of the Finance Act, 1994. It was imposed on a initial set of three services in 1994 and the scope of the service tax has since been expanded continuously by subsequent Finance Acts. The Finance Act, extends the levy of service tax to the whole of India, except the State of Jammu & Kashmir.

The Central Board of Excise & Customs (CBEC) under Department of Revenue in the Ministry of Finance, deals with the task of formulation of policy concerning levy and collection of Service Tax. In exercise of the powers conferred, the Central Government makes service tax rules for the purpose of the assessment and collection of service tax. The Service Tax is being administered by various Central Excise Commissionerates, working under the Central Board of Excise & Customs. There are six Commissionerates located at metropolitan cities of Delhi, Mumbai, Kolkata, Chennai, Ahmedabad and Bangalore which deal exclusively with work related to Service Tax. Directorate of Service Tax at Mumbai over sees the activities at the field level for technical and policy level coordination.

Registration

• A person liable to pay service tax should file an application for registration within thirty days from the date on which the service tax on particular taxable service comes into effect or within thirty days from the commencement of his activity.


• Every service provider of a taxable service is required to take registration by filing the Form ST-1 in duplicate with the jurisdictional Central Excise Office.


• A ‘registered' service provider is referred to as an ‘assessee'.


• A single registration is sufficient even when an assessee is providing more than one taxable services. However, he has to mention all the services being provided by him in the application for registration and the field office shall make suitable entries/endorsements in the registration certificate.


• A fresh registration is required to be obtained in case of transfer of business to another person.


• Any registered assessee when ceases to provide the taxable service shall surrender the registration certificate immediately.


• In case a registered assessee starts providing any new service from the same premises, he need not apply for a fresh registration. He can simply fill in the Form S.T.1 for necessary amendments he desires to make in his existing information. The new form may be submitted to the jurisdictional Superintendent for necessary endorsement of the new service category in his Registration certificate.
  

In case of Individuals or Proprietary Concerns and Partnership Firm, service tax is to be paid on quarterly basis. The due date for payment of service tax is the 5th of the month immediately following the respective quarter. (Quarters are : April to June, July to September, October to December and January to March). However, payment for the last quarter i.e. January to March is required to be made by 31st of March itself. In case of any other category of service provider than specified above, service tax is to be paid on a monthly basis, by the 5th of the following month. However, payment for the month of March is required to be made by 31st of March itself. Service tax is to be paid on the amount realized / received by the assessee during the relevant period ( i.e. a month or a quarter as the case may be).

The unique feature of Service Tax is reliance on collection of tax, primarily through voluntary compliance. System of self-assessment of Service Tax Returns by service tax assesses was introduced w.e.f. 01.04.2001. The jurisdictional Superintendent of Central Excise is authorized to cross verify the correctness of self assessed returns. Tax returns are expected to be filed half yearly. Central Excise officers are authorized to conduct surveys to bring the prospective service tax assesses under the tax net.

Service tax is payable @ 12% of the ‘gross amount' charged by the service provider for providing such taxable service. The Education Cess is payable @ 2% of the service tax payable.

Service Tax Exemptions

The Central Government can grant partial or total exemption by issuing an exemption notification. But it cannot be granted by the Government with retrospective effect. The general exemptions are :-

• Small service providers whose turnover is less than Rs 4 lakhs per annum are exempt from service tax.


• There is no service tax on export of services.


• Services provided to UN and International Agencies and supplies to SEZ(Special Economic Zones) are exempt from service tax.


• Service tax is not payable on value of goods and material supplied while providing services. Such exclusion is permissible only if Cenvat credit on such goods and material is not taken.

Service Tax Profiles

S.No	Service Category
1	Advertising Agency
2	Air Travel Agents
3	Architect
4	ATM Operations, Management or Maintenance
5	Auctioneers' service
6	Authorised Service Station
7	Auxiliary to General Insurance / Life Insurance
8	Banking & Other Financial Services
9	Beauty Parlour
10	Broadcasting Service
11	Business Auxiliary Service
12	Business Support Service
13	Cable Operator
14	Cargo Handling Service
15	Practising Chartered Accountant, Practising Cost Accountant and Practising Company Secretary
16	Cleaning Service
17	Clearing & Forwarding Agents
18	Clubs and Associations
19	Commercial Training or Coaching Centre
20	Commissioning and Installation Service
21	Residential Complex Construction
22	Consulting Engineers
23	Convention Services
24	Courier Services
25	Credit Card, Debit Card, Charge Card or other payment card related services
26	Credit Rating Agencies
27	Custom House Agent
28	Dredging
29	Dry Cleaning
30	Event Management
31	Facsimile Service
32	Fashion Designer
33	Franchise Services
34	General Insurance
35	Health Club & Fitness Centre
36	Interior Decorator
37	Internet Café
38	Internet Telephony Service
39	Leased Circuit
40	Mailing List Compilation and Mailing
41	Management Consultant
42	Maintenance or Repair Service
43	Mandap Keepers
44	Manpower Recruitment Agency
45	Market Research Agency
46	On-line Information & Database Access or Retrieval Service
47	Packaging Service
48	Pager Services
49	Photography Service
50	Port Services
51	Public Relations Service
52	Rail Travel Agent
53	Real Estate Agent
54	Recovery Agent
55	Registrar to an Issue
56	Rent - a - Cab Scheme Operators
57	Sale of space or time for Advertisement
58	Scientific and Technical Consultancy
59	Security Agencies
60	Share Transfer Agent
61	Ship Management
62	Site Preparation
63	Sound Recording Service
64	Sponsorship service
65	Steamer Agent
66	Stock Broker
67	Storage & Warehousing
68	Survey and Map Making
69	Technical Testing & Analysis Agency / Technical Inspection & Certification Agency
70	Telephone
71	Telex Service
72	Telegraph Service
73	Tour Operator
74	Transport of goods by Road
75	Transport of goods in containers by rail (other than Indian railway)
76	Transport of goods through Pipeline or other conduit
77	Transport of passengers embarking on international journey by air, other than economy class passengers
78	Transport of persons by cruise ship
79	Underwriting Service
80	Video Tape Production Service

FAQ on Service Tax