SERVICES TAX APPLICABILITY ON CONSULTING ENGINEER SERVICES

Meaning of   “Consulting Engineer”?

Date of effective: Notification No.23/97-ST, dated 02.07.1997. 

Consulting Engineer is any professionally qualified engineer or engineering firm who, either directly or indirectly, renders any advice, consultancy or technical assistance in any manner to a client in one or more disciplines of engineering. tax consulting company

ISSUE: Whether a self-employed professionally qualified engineer can be considered as ‘consulting engineer’ [section 65(31)] and service provided by such self-employed professionally qualified engineer to a client in relation to one or more discipline of engineering is liable to service tax under consulting engineer service [section 65(105)(g)]?

CLARIFICATION ISSUED BY BOARD VIDE CIRCULAR NO.96/7/2007-ST DATED 23.08.2007)

Yes Consulting engineers include self-employed professionally qualified engineer, whether or not employing others for assistance.

Services provided by such self-employed professionally qualified engineer to a client in relation to one or more discipline of engineering is liable to service tax under consulting engineer service [section 65(105)(g)].   

TYPE OF SERVICE

The taxable service rendered by a consulting engineer means any service provided to a client, by a consulting engineer in relation to advice, consultancy or technical assistance in any manner in one or more disciplines of engineering.

The services which attract the levy include all the services which are rendered in the capacity of a professional person and specifically include the services pertaining to structural engineering works, civil/mechanical/electrical engineering work or relating to construction management. All services rendered within the scope of the term engineering attract Service Tax provided they are rendered in the capacity of a consulting engineer. The scope of the services of a consultant may include any one or more of the following categories: -

         i.            Feasibility study;

        ii.            Pre-design services/project report;

      iii.             Basic design engineering;

      iv.             Detailed design engineering;

       v.             Procurement;

      vi.             Construction supervision and project management;

    vii.              Supervision of commissioning and initial operation;

   viii.              Manpower planning and training;

      ix.             Post-operation and management;

       x.        Trouble shooting and technical services, including establishing systems and procedures for an existing plant. Know more about information: service tax registration

The list is only illustrative