"Facsimile (FAX)" means a form of telecommunication by which fixed graphic images

Indian Service Tax

Facsimile Service

Effective Date: 16/07/2001

Authority: Notification No. 4/2001-ST, dt. 9/7/2001 (for full text of Notification see under Broadcasting).

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%.

Definitions

"Facsimile (FAX)" means a form of telecommunication by which fixed graphic images, such as printed texts and pictures are scanned and the information converted into electrical signals for transmission over the telecommunication system; [Section 65(42)]

Taxable service: Facsimile service provided by the telegraph authority in relation to facsimile communication to a subscriber.

Value of taxable service: Gross amount charged from the subscriber, but the initial deposit made by the subscribers at the time of application shall not be included in the value of taxable service. However, any adjustment made by the Telegraph Authority from any deposit made by the subscribers at the time of application for such services shall be included.

Exemptions

• Fascimile Services where service charges are based on the number of telephone calls.

• Private fax operators – F.No. BII/I!2000-TRU, dt. 9/7/2001 ­- Annexure XII.

• Private PCO.

Person liable to pay: Telegraph Authority.

Head of Account

S1. Code SCCD Minor-head 004400137 Facsimile Service 00440148 Sub-head 00440013701 Tax Collection 00440149 118 Sub-head 00440013702 Other Receipts 00440150 110 Sub-head 00440013703 Deduct Refunds 00440151 111

Main text of Departmental Circular/TN

[Ministry's F.No. B.II/I/2000-TRU dated 9/7/2001 - Annexure XII]

1. As per Section 65(72) (zd),(ze), (zf) and (zg), taxable service in relation to these services is any service provided, to a subscriber, by the telegraph authority in relation to leased circuits, telegraph, telex and facsimile communication.

2. As regards facsimile services, at present the telegraph authorities are providing it i.n two ways. One is "bureau fax" where the charges are based on a flat rate per page depending upon paper size and the other is "ordinary fax" where charges are equivalent to the number of calls consumed in faxing the paper. In case of "bureau fax", this is provided by the Dept. ofTelecomthrough post and telegraph offices. In the second type of facsimile service, the service charges are equal to the telephone calls consumed and it is already covered in the ambit of service tax under the category of telephone connections. Therefore, service tax will not be payable in respect of those facsimile services where service charges are based on the number of telephone calls consumed. Private fax operators are providing the second kind of facsimile service and therefore, they are not liable to service tax again.

3. In respect of telegraph, telex and leased services, any service provided by the telegraph authority in this regard is the taxable service and service tax on such services shall be collected in the same manner as applicable to telephone services.