Service tax is applicable only if there is activity


there is consideration

 Consideration without activity not taxable (like gifts)

 Also activity without consideration not taxable (like free service)



means everything received or recoverable in return for a provision of service

It may be



Non Monetary

Even deferred consideration covered


It may be received 

directly by service receiver


indirectly from some other person on behalf of other person


When is Consideration taxable

There should be

direct link or immediate connection

between activity and consideration

Otherwise service tax not leviable



Whether following  Consideration taxable?

Nobel prize received for lifetime contributuion

View Answer


Services received from government against taxes paid

View Answer


Imposition of fine, penalty by government

View Answer
  1. Service Tax
  2. Basic Concepts of Service Tax

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 11 years. He also provides Accounts Tax GST Training in Delhi and Pune.