Annexure III

Convention services:

1. As per section 65(19), "convention" has been defined to mean a formal meeting or assembly which is not open to the general public, and does not include a meeting or assembly the principal purpose of which is to provide any type of amusement, entertainment or recreation. As per section 65(72)(zc), the taxable service is any service provided, to a customer, by a commercial concern in relation to holding of a convention.

2. Any service provided for holding a conference, seminar, meetings etc by a commercial concern will come under the tax net. The service could be in the nature of providing of room/ hall for the convention. The services could also include providing other facilities such as video conferencing, equipment such as over head projectors, video-roma (LCD projector), speakers, microphones, technical staff for operating these equipments and stationery, etc apart from providing space for holding a convention. The charges for such facilities shall also be included in the value of taxable service. In some cases it may appear that it is same as the service rendered by a "mandap keeper". Apart from the fact that there is a subtle distinction between the type of events (official, social or business function in the case of mandap keeper as opposed to formal meeting in the case of convention services) it is clarified that the intention is not to charge the service tax twice on the same service. If a service provider is already registered as a mandap keeper and paying service tax, he is not liable to pay service tax again under the category of convention services. Similarly, a convention service is not liable to tax as mandap keeper service also.

3. A doubt has been raised whether holding of conventions by Chambers of Commerce and Industry for their members would be liable to service tax. In this regard, it is clarified that service tax, in the case of convention services, is applicable only when the service is provided by a commercial concern. If the Chamber of Commerce and Industry is not a commercial concern, then the tax does not apply. The memorandum and articles of association of a Chamber of Commerce & Industry would indicate whether it is a commercial concern or not. It is informed by the Chambers that generally they are not commercial concerns.