[Section 65B(44)]

Service means

  any activity for consideration

  carried out by a person for another and

  includes a declared service.


Service shall not include

  • Sale/Gift etc of Immoveable property
  • Sale/delivery/supply of goods ( moveable Property)
  • Transaction in money/actionable claim*
  • Service from employee to employer
  • Court fees  


Also it has provided in Explanation 1,that

  1. Functions of   MP/MLA/Municipal Councillor etc not considwered service
  2. Duty performed by any person who holds a constituitional post is not regarded as service


  • Hence, Activity should be carried out for consideration. If not carried out for consideration, then not considered a service and no service tax will be levied on it
  • Only service carried out from one person to another covered, service to self not covered
  • (For example-No service tax on service provided to own branch)
  • It includes a declared service. Declared service means 9 services which have been specified in Section66E) Service tax will be levied on these.
    • For example Renting of Immoveable Property.These will be studied in detail in CA Final)




Q1 What is actionable claim? Whether Service tax applicable on it?

View Answer


 We know that Service does not include transactions in money or actionable claim

As per Newly inserted Explanation 2,

“transaction in money or actionable claim” shall not include––

1. Activity relating to use of money or its conversion from one form to another (Example- Money Changer Service )

2.Activity for FACILITATION OF transaction in money or actionable claim like

  • l ottery distributor/Selling Agent of Lottery on behalf of Central Govt in relation to promotion,,marketing,selling of lottery or facilitating in organising lottery of any kind, in any other manner, in accordance with the provisions of the Lotteries (Regulation) Act, 1998.”(New Amendment)
  • Chit fund (Foreman of Chit fund)

Hence, service tax will be imposed on Money changer service,lottery service/chit fuind service and it cannot be said that these are transaction in money/actionable claim and hence not taxable


Relevant Definitins:-

“Foreman of chit fund

shall have the same meaning as is assigned to the term
foreman in clause (j) of section 2 of the Chit Funds Act, 1982


“Lottery distributor or selling agent means

a person appointed or authorised by a State

for the purposes of promoting, marketing, selling or facilitating in organising lottery of any kind, in any manner,

organised by such State in accordance with the
provisions of the Lotteries (Regulation) Act, 1998.”



Q2 Whether Service tax applicable on Salary to Employees?

View Answer



Mention briefly the specific exclusions from the definition of the term 'service' as provided in section 65B(44) of the Finance Act, 1994. 

View Answer
Go Ad-free
CA Maninder Singh's photo - Co-founder, Teachoo

Made by

CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.