Indian Service Tax
Interior Decorators
Effective Date: 16/10/1998.
Authority: Notification No. 53/98-ST, dt. 7/10/1998 (for full text of Notification see under 'Architect').
Rate of Service Tax: 8% from 14/5/2003 (5% upto 13/5/2003). 10% from 10/9/2004 - Cess 2% of 10% = 0.2. Total ST = 10.2%.
Definition
"Interior Decorator" means any person engaged, whether directly or indirectly, in the business of providing by way of advice, consultancy, technical assistance or in any other manner, services related to planning, design or beautification of spaces, whether man-made or otherwise and includes a landscape designer, [Section 65 (59)]
Taxable service: Interior Decorator providing service to a client in relation to planning, design or beautification of spaces, whether man-made or otherwise in any manner.
Value of taxable service: Gross amount charged from the client by such interior decorator from the client for services rendered in professional capacity in any manner.
Exemptions
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Sub-contracting
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Supply of materials, items of furniture or decoration
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Art directors of films, temporary structures/settings for shooting
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Artists, Carpenters & Painters
Person liable to pay: Interior decarator or Landscape designer.
Head of Account
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Questions & Answers
Q.5 Who is an ' Interior Decorator'?
Ans. "Interior decorator" is a person engaged, whether directly or indirectly, in the business of providing by way of advice, consultancy, technical assistance or in any other manner, services related to planning, design or beautification of spaces, whether man-made or otherwise and includes a landscape designer.
Q. 6 What is the taxable service in case of Interior decorator?
Ans. Taxable service is a service provided to a client, by an interior decorator in relation to planning, design or beautification of spaces, whether man made or otherwise, in any manner.
Q.7 What is the value of the taxable service in case of an Interior Decorator?
Ans. Value of the taxable service in relation to the service provided by an interior decorator to a client, is the gross amount charged by such decorator from the client for services rendered in relation to planning, design or beautification of spaces in any manner.
Q. 8 How would the Service tax liability be determined in cases of ongoing projects, i.e., the projects which started before 16th October, 1998 and still continuing after 16thOctober, 1998.
Ans. In such cases, the service tax is payable only in respect of the part of the services rendered on or after the date on which the service tax provisions come into force i.e 16thOctober, 1998. Service tax is not required to be paid on payment received for services rendered prior to the service concerned being notified.
Q.9 Is service tax also liable to be paid by an Architect or an interior decorator to whom the work has been delegated by another Architect or Interior Decorator?
Ans. No, in cases where an architect/interior decorator sub-contracts part/whole of his work to another architect/interior decorator, no service tax is required to be paid by the sub-contractor provided that the principal architect/ interior decorator has paid the service tax on the services rendered by him to the client and provided the sub-contracting is in respect of the same service category.
For instance when the work is sub contracted by one architect to another architect, if the principal architect pays the service tax on services rendered by him to his client, the sub-contracting architect is not .required to pay the service tax. However, service tax would be required to be paid in a case where sub contracting is to different service category. For example where an architect sub contracts his work to a consulting engineer, then service tax would be required to be paid separately by both the architect and the consulting engineer on the services rendered by them.
Q. 10 Is the payment made by an Architect or Interior Decorator for supply of material, items of furniture or decoration includible in the value of the taxable service?
Ans No. The service tax is not leviable on supply of materials, items of furniture or decoration, per se, but only on services rendered in any manner concerning planning, design or beautification of spaces.
Q. 11 Are the Services rendered by the Art director of films and others for setting up temporary structure or sets for shooting .covered in the category of service provided by an Architect or Interior Decorator?
Ans. No. The services rendered by Art directors of films and others who render services of design etc. for setting up temporary structures/settings for shootings, etc. do not attract the service tax levy as such interior decoration is only of a temporary nature.
Q. 12 Whether Vaastu/Feng Shui Consultants come under the category of Interior Decorators?
Ans. Interior Decorator means any person engaged whether directly or indirectly, in the business providing by way of advice, consultancy, technical assistance or in any other manner services related to planning, design or be antification of spaces, whether man made or other wise. Since Vaastu/ Feng Shui Consultants are offering services by way of advice relating to planning and designing of spaces, they come under the category of Interior Decorators.
[Source CBEC Website]
Main text of Departmental Circular/TN
[TN No. 116/98-ST, Dated 15/10/1998 of Hyderabad Commissionerate)
4.4 As per Section 65(20) "interior decorator" means any person engaged, whether directly or indirectly, in the business of providing by way of advice, consultancy, technical assistance or in any other manner, services related to planning, design or beautification of spaces, whether man-made or otherwise and includes a landscape designer. The "taxable service" in the case of an interior decorator means any service provided to a client in relation to planning, design or beautification of spaces, whether man-made or otherwise, in any manner.
4.5 An issue has been raised as regards the basis on which determination of the service tax liability on ongoing projects (on the date of service tax coming into effect) is to be made. In this regard it is clarified that service tax is payable only in respect of services rendered on or after the date on which the service tax provisions come into force. Service tax is not required to be paid on payments received for services rendered prior to the service tax concerned being notified.
4.6 Further, in cases where an architect/interior decorator sub-contracts part/whole of his work to another architect/interior decorator, it is clarified that no service tax is required to be paid by the sub-contractor provided that the principal architect/interior decorator has paid the service tax on the services rendered by him to the client and provided the sub-contracting is in respect of the same service category. In other words, work is sub-contracted by one architect to another architect. In such cases, if the principal architect pays the service tax on services rendered by him to his client, the sub-contracting architect is not required to pay the service tax. However, service tax would be required to be paid in a case where sub-contracting is to a different service category. For example where an architect sub-contracts his work to a consulting engineer, then service tax would be required to be paid by both the architect and the consulting engineer on the services rendered by them. Similarly, a market research agency would be required to pay service tax on services rendered by it to an advertising agency, even if the advertising agency is also liable to pay service tax on the amount billed to its client for advertising services (which,inter alia,includes the amount paid by the advertising agency for such market research services to the market research agency).
4.7 It is also clarified that service tax is not leviable on supply of materials, items of furniture or decoration, per se, but on services, rendered in any manner, concerning planning, design or beautification of spaces. Also the services rendered by Art directors of films and others who render services of design etc. for setting up temporary structures/settings for shootings etc. do not attract the service tax levy as such interior decoration has no permanency and is only of a temporary nature.
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