Contributed by Ruhi Jhota

Exemption notifications are like kins of the main tax norms. They form part of mainstream but still face opposite. Where tax norms aims at raising the Government inflows by imposing varied taxes, other relieves but reducing the tax burdens by some means.

Exemption Notification is designed with foresightedness, to encourage development & growth of certain backward economic sectors by reducing the tax burden resting on them. Service Tax provisions that offer such relief to its tax payers is throughMega Exemption Notification No. 25/2012-ST dated 20.06.2012. The Central Board of Excise and Customs has recentlyexpanded the scope to this by adding certain more activities to the said list,vide Notification No. 20/2015-ST dated 21.10.2015. Thus few more activities are now uncovered from the bracket of Service Tax.

The recent Notification exempts services provided in a capacity of a business facilitator or a business correspondent,where it has been provided to a banking company with respect to a Basic Savings Bank Deposit Account, covered by ‘Pradhan Mantri Jan DhanYojana’. Such service provided to the Banking Company is limited to the extent of their rural area branches only. The said exemption is in relation of services provided by way of account opening, cash deposits, cash withdrawals, obtaining e-life certificate, and Aadhar seeding.

In addition to this, the Notification 20/2015-ST dated 21.10.2015 also exempts any person providing service as an intermediary to a business facilitator or a business correspondent to an Insurance company in a rural area. Important to take note is that, the facilitator or correspondent providing services in relation to non-rural branch of banking company or insurance company will not be covered under the said exemption. The benefit that flows from this exemption is that this will cut down the costs, of banks and insurance companies.

Thereby this comes as a blessing in disguisefor the nation, as it will provide open environment for expansion of banking and insurance sectors to less privileged areas.

Board with an intent to promote healthier lifestyle among masses, has taken positive step by including yoga to the Mega Exemption Notification vide Notification No. 20/2015-ST dated 21.10.2015. The recent notification has extended its definition by adding yoga to the definition of charitable activities. Prior to this the definition was limited to advancement of religion and spirituality only. Thus from 21.10.2015 the charitable trusts who organize any activity for spreading awareness or advancement of yoga are eligible to enjoy immunity from Service Tax levy.

Previously, Notification No. 25/2012-ST dated 20.06.2012 exempted yoga activities only when they wereprovided as a part of clinical treatment by any Clinical Establishment. This levy was limited to only recognized systems of medicine. Since yoga is considered to be one of the recognized systems of medicine, this was construed to be exempted.

Thus from 21.10.2015, any awareness or advancement activity provided in relation to yoga, by any charitable entity will be exempt from the scope of Service Tax levy. It is a thus a healthy policy of the Government, which will providedouble benefits to yoga activitiesone by way of clinical cure and other as charitable advancement. This step of expansion by offeringdual exemption to yoga is heartiously welcome for a healthier lifestyle of the citizens.

About Author

Ruhi Jhota is a lawyer and practicing in Indirect Taxes. She possesses strong research background which is required to present the complexity of taxation in terms that a layman can understand.

Contact for queries: ruhijhota@gmail.com