AUTHORISED SERVICE STATION

Date of Introduction: 16.07.2001 vide Notification No.4/2001-ST dt.09.07.2001

Definition:

“Authorized service station” means any service station or center, authorized by any motor vehicle manufacturer, to carry out any service or repair of any motor car or two wheeled motor vehicle manufactured by such manufacturer. (Section 65(8) of Finance Act, 1994 as amended)
 

Taxable events and scope of service:

The taxable service is any service provided to a customer by an authorized service station, in relation to any service or repair of motorcars or two wheeled motor vehicles.
(Section 65(72)(zo) of Finance Act, 1994 as amended)

Any service or repair provided by an authorized service station in relation to motorcars and two wheeled motor vehicles only, will be covered in the ambit of Service Tax. Examples of taxable services include services provided during warranty period, subsequent services such as routine check of performance of engine and vehicle, engine tuning, engine oil check, gear oil check, wheel alignment, wheel balancing, clutch and brake adjustment, wheel rotation, cleaning/washing and any repairs undertaken.

Authorized service station provides free service in respect of new vehicles during the warranty period on behalf of the manufacturer and they are reimbursed for the same by the manufacture of such vehicle. Since the definition for value of taxable service specifically provides that the reimbursement received from the manufacturer of motor vehicles for free service rendered to the customer is includible in the taxable value, such reimbursement is leviable to Service Tax.
(Ministry’s F.No.B11/1/2001-TRU dt.09.07.2001)

Value of taxable service:

The value of taxable service means gross amount charged by service provider for such service rendered by him and includes the reimbursement received by the authorized service station from manufacturer for carrying out any service of any motor car or two wheeled motor vehicle manufactured by such manufacturer, but dose not include the cost of parts or accessories, if any, sold to the customer during the course of service or repair of motor car or two wheeled motor vehicles. (Section 67 of Finance Act, 1994 as amended)
 

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