Government of India
Ministry of Finance
Department of Revenue
(Central Board of Excise & Customs)
Circular No. 146/15/2011 – Service Tax
New Delhi, the 20th September 2011
To
Chief Commissioners of Central Excise & Customs (All)
Chief Commissioners of Central Excise (All)
Director General of Central Excise Intelligence
Director General of Audit & DGST
Commissioners of Service Tax (All)
Madam/Sir
Subject: Service Tax – Audit of the accounts of M/s Bharat Sanchar Nigam Ltd,
Tiruchirapalli – Issue of eligibility or otherwise of Notification No.03/1994 -
ST dated 30.6.1994 in case of telephone services for local calls provided
through Village Panchayat Telephones – regarding.
Reference has been received from the Chief Commissioner, Central Excise,
Coimbatore, wherein, a clarification has been requested for uniformity in
assessment as regards levy of service tax on telephone services rendered by M/s
BSNL through Village Panchayat Telephone (VPT) with local call facility, after
M/s BSNL have become a public sector unit.
- The issue in brief is that M/s. BSNL, which was earlier (that is, prior to
1.11.2000) known as Department of Telecommunications, had been rendering
telephone services through Village Panchayat Telephone (VPT) for local call
facility.
2.2 Notification No.3/94-ST dated 30.6.1994 exempts specified taxable services
and includes interalia - ‘Departmentally run Public Telephones for local calls’
(Sl.No.12 of the table under the Notification). Thus, upto 31.10.2000, the
Department of Telecommunications was correctly availing exemption under the
above provisions for rendering the said services. However, after 1.11.2000,
Department of Telecommunications was corporatized into M/s BSNL, a public sector
undertaking. Therefore, a doubt has arisen as to whether M/s BSNL would be
eligible for the said exemption under Sl.No.12 of the table appended to
notification No.3/94, since it is not a government department anymore. There
have been conflicting views on the subject and a clarification has therefore
been requested.
- The matter has been examined. As per Sl.No.13 of the table appended to the
Notification No.3/94(S.T.) dated 30.6.94, there is exemption for ‘Guaranteed
Public Telephone operating only for local calls’ and therefore, M/s. BSNL is
eligible for exemption under this provision. In this context, the PSU Division
of Department of Communications, Ministry of Communications and IT, has also
clarified that Village Public Telephones (VPTs) with facility of local calls
(without 95 dialing facility or STD facility) would fall under the category of
‘Guaranteed Public Telephone operating only for local calls’.
- Thus, even after 1.11.2000, M/s. BSNL continue to be covered under the ambit
of the said notification (by virtue of Sl.No.13 of the table appended to the
notification) and, therefore, are clearly eligible for exemption.
- It is requested that all pending matters on this issue may please be decided
accordingly.
Yours faithfully
(Deepankar Aron)
Director (Service Tax)
CBEC, New Delhi
Ph. 011 2309 3355
F. No. 137/115/2011 – Service Tax